The €100m Dutch pension fund for specialist chemicals firm Norit wants to liquidate and join BPL, the €17.1bn sector scheme for agriculture.

According to the board – chaired by Frans Prins, the former director of the €8.8bn pension fund PWRI – this would be the best option for all of its 1,000 participants.

An earlier effort to join the €23.3bn multi-sector scheme PGB failed because of the high costs involved.

The Norit pension fund said the BPL arrangements were better because of its lower franchise – the part of an employee’s salary exempt from pensions accrual – and higher annual accrual rate.

In addition, BPL’s coverage ratio (102.3% at the end of February) was significantly higher than Norit’s, which stood at 97.1%.

The board of the Norit scheme made clear that, were the pension fund to remain independent, benefit cuts would be likely in 2020.

The pension fund, with 300 active participants, almost 300 deferred members and 400 pensioners, had already applied a cut of 10% to pension payments five years ago.

Joining BPL would require bridging the funding gap, which could be achieved either by another rights cut or through an additional contribution from the employer, US-based Cabot, which bought Norit in 2012.

Joining PGB would have required an extra payment of €9m from the sponsor to fill a funding difference of 8%. The company was not prepared to pay this, according to the pension fund.

It said that the employer hadn’t provided clarity yet whether it was willing to pay the required additional contribution this time.

The board argued the one-off payment would be compensated in part by lower administration costs and lower premiums.

The administration of the pension fund of Norit – a specialist producer of “activated carbon” – is carried out by Mercer. NN Investment Partners is its asset manager.