Baksteen, the €201m industry-wide pension fund for the Dutch brick-making sector, is to join the large scheme for the building industry BpfBouw

On 1 March, the pension assets will be transferred to the €48bn BpfBouw, which will then start paying pensions to the 2,585 pensioners of Baksteen.

The scheme’s 1,400 active participants have already been accruing pension rights with BpfBouw since 1 January.

Baksteen has 2,050 deferred members.

According to the board of the brick-makers’ scheme, unions and employers concluded that continuing as an independent organisation was no longer an option, despite its boasting a coverage ratio of 120.5% at year-end.

“The number of participants keeps on falling, costs are to rise substantially, governing is becoming increasingly difficult, and legal conditions keep on coming,” the board said.

“As a consequence, the contribution of 22.2% last year would have had to increase significantly as of 2015.”

BpfBouw will charge a premium of 20.2% in 2015, while its franchise – the part of the salary exempt from pensions accrual – of €12,642 is €3,358 lower than that of Baksteen.

The board of the Bedrijfstakpensioenfonds voor de Baksteenindustrie had granted all its participants a 1% indexation just ahead of the transfer.

Moreover, due to its financial position – the funding ratio at BpfBouw is 114.5% – the Baksteen board has promised its participants an “additional bonus”, yet to be specified.

Presenting its quarterly figures last week, BpfBouw announced that it would use the one-off option within the new financial assessment framework (FTK) to fine-tune its investment-policy risk profile.

Mieke Veldhuizen, chair at BpfBouw, said: “As a consequence, we reckon we can leave our recovery status soon and increase our chances of granting full indexation.”

The pension fund for the building sector also indicated that it would invest €530m in Dutch real estate this year, of which €30m was committed to maintenance projects.

In 2014, the scheme also invested €500m in local building projects.

See Sameer Van Alfen’s recent story on the Dutch regulator banning a trustee from the pensions industry