The pension fund of industrial cleaning sector Orsima has ultimately opted for a merger with Vervoer, the €19.6bn pension fund for private road transport, rather than BPF Schoonmaak, the industry-wide scheme for the cleaning sector.
The €70m scheme, said that it could not reach a final agreement with Schoonmaak, despite the advanced stage of the negotiations about a merger last October.
According to the board of the Orsima scheme, it had subsequently decided to proceed with Vervoer, as the transport scheme had also been selected as a potential new provider.
The other candidates were BpfBOUW, the industry-wide pension funds for the building industry, and the graphics industry fund PGB as well as insurer Aegon, the pension fund previously said.
Meanwhile, supervisor De Nederlandsche Bank (DNB) has approved a collective value transfer of the assets of the Orsima scheme to Vervoer as of 1 January 2015, the scheme added.
Under the new arrangement, the annual pensions accrual of the participants of the Orsima scheme would rise by 2 basis points to 1.77%, whereas the franchise – the part of the salary which is exempt from pensions accrual – would increase by €145 to €11,395.
In addition, the pension paid to dependants would change from risk-based to accrual-based, and future inflation compensation would be guided by the salary index rather than the consumer index.
The Orsima added that the pension contribution would remain unchanged, at a total of 23% of the pensionable salary, of which 10.85% to be paid by the workers.
As of last November, Pensioenfonds Orsima had a funding ratio of 111.8%, while the coverage of Pensioenfonds Vervoer was 112.7%.
The Orsima scheme has approximately 1,100 active participants, 1,400 deferred members and 350 pensioners, affiliated with 38 employers.
Its board has said that it wanted to merge, as it deemed itself vulnerable because of its modest scale as well as its relatively high costs.
It reported administration costs of €937 per participant over 2013, which is more than three times the average for Dutch pension funds.