The €700m Dutch pension fund of telecommunications company Alcatel-Lucent has joined the €40bn metal scheme PME as of 1 October.

The Alcatel-Lucent scheme placed the pension rights of its 1,700 pensioners and 2,400 deferred members with the industry-wide pension fund for the metal and electro-technical engineering sectors.

Because the sponsor company terminated its contract for pensions provision, the pensions accrual of the scheme’s limited number of active participants has been outsourced to Blue Sky Group since 2012.

Last month, the Alcatel-Lucent scheme said it was accelerating its liquidation process to benefit from the recent decline in equity markets.

Because the equity market downturn had little effect on the scheme, due to its limited stock holdings, it explained that bridging the funding gap with any potential merger partner would now be easier.

PME said the transfer of pension rights would be carried out on a ‘funding neutral’ basis.

At the end of August, the Alcatel-Lucent scheme’s official policy coverage ratio stood at 97.5%, while PME’s policy funding was 99.8%.

The Dutch regulator forced the transfer of pension rights after the Alcatel-Lucent scheme lost its sponsor’s support.

Because the scheme was under-funded at the time, it was legally required to liquidate. 

However, the liquidation process was delayed after a court case between the pension fund and the employer, which the scheme lost last year. 

PME said Blue Sky Group would remain as pensions provider over the next six months.

PME’s regular provider is MN. 

The merger of the Alcatel-Lucent Pensioenfonds with PME is part of an extensive consolidation process in the Dutch pensions sector. 

So far, several dozens of predominantly company schemes have joined PME, including the pensions funds of truck maker DAF, car manufacturer Nedcar, the industrial conglomerate Stork and ship yard De Schelde. 

Over the past six years, the metal scheme has seen its assets increase by €7bn due to value transfers from joining pension funds. 

PME manages the pension rights of approximately 630,000 participants who are affiliated with almost 1,300 large and medium-sized companies.