Verka VK Kirchliche Vorsorge VVaG, the provident fund responsible for investments and pension management for regional evangelical churches, is taking over the operational business of the pension scheme for the Red Cross in Germany – Pensionskasse vom Deutschen Roten Kreuz VVaG – pushing its total assets managed by the Verka Group (Verka Verbund) to €4bn.
“We will provide the full scope of services required to run the pension fund for the German red Cross, from HR, to legal, actuarial services, and asset management,” Eugen Scheinker, board member for Verka Pensionskasse, told IPE.
Verka Group manages the Kirchliche Pensionskasse, a multi-employer occupational pension provider, the provident fund VK Kirchliche Vorsorge VVaG, the VIFA Pensionsfonds with €400m in total assets, sold by Verka to the multi-employer occupational pension fund Pensionskasse für die Deutsche Wirtschaft (PKDW), and segregated accounts for churches.
Verka will manage close to €4bn by adding the €780m under the Deutschen Roten Kreuz scheme, Scheinker said.
The boards of both pension funds have decided to join forces with the aim of ensuring the Red Cross scheme continues to operate efficiently, and in the interests of its members, Verka said in a LinkedIn post.
The pension schemes believe this latest step will create synergies necessary to achieve “efficient and effective” business operations in an environment of increasing regulatory requirements and digitalisation, it added.
Karin Germann, a current board member for the Red Cross scheme who was responsible for starting and leading the outsourcing process of the business operations to Verka, will resign at her own request upon completion of the project, the post added.
Going forward, the executive board will consist of Vera Schopohl, Charlotte Klinnert and Eugen Scheinker.
Philip Jungs, chair of the supervisory board for the German Red Cross pension fund, said: “With Verka we have gained a strong and highly competent partner. The Verka group’s value-oriented management approach suits us. We delegate management from a position of strength. In this respect, we consider the decision to be forward-looking.”
A fragmented landscape
The German occupational pension landscape is fragmented, with 125 Pensionskassen in total providing occupational pensions, including approximately 80 having assets under management below €1bn, according to the latest statistics published by the financial supervisory authority BaFin.
Managing requirements, for example, sustainability or risk management, is becoming increasingly challenging for German pension funds, especially smaller ones.
“You need a certain size in order to run services efficiently,” Scheinker said.
Pension funds are under pressure to outsource their business operations or to transfer liabilities to other pension funds.
“Small pension funds are trying to find partners that can take over liabilities and bigger ones look for someone providing services,” said Scheinker, as is the case of Deutschen Roten Kreuz scheme.
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