The €3bn pension fund of Dutch insurer Delta Lloyd has confirmed it is exploring its future options, including the possibility of liquidation. 

The scheme said it extended the contracts for pensions provision and re-insurance by no more than one year, rather than the usual five-year period.

The extension coincides with the expiration of the current collective labour agreement (CAO), which includes the agreements on pensions.

Unlike many Dutch financial institutions that have switched to collective defined contribution (CDC) arrangements, Delta Lloyd still has a defined benefit pension plan.

In its new contract, it has had to increase its contribution due to low interest rates, it said.

The pension claims of the scheme’s 4,000 participants have been re-insured with Delta Lloyd itself.

Dutch unions voiced concerns as far back as 2014 that Delta Lloyd – much like asset manager Robeco, insurer Achmea and the banks ABN Amro, ING and NIBC – would switch to CDC.

Many companies have sought to offload pension liabilities from their balance sheets following new accounting rules resulting from Solvency II.

The pension fund said it was looking into three options, including continuing its current re-insured scheme, as well as ending re-insured arrangements and taking pensions “under its own wing”.

The third alternative is liquidation and subsequently placing the pension plan with an insurer or the new general pension fund APF.

Previously, Delta Lloyd said it would establish such a pensions vehicle.

The pension fund declined to specify whether its options would be limited to keeping the pension plan with the employer or its APF.

In 2014, IPE’s Dutch sister publication Pensioen Pro named the Delta Lloyd Pensioenfonds the best DB scheme in the Netherlands.

Its coverage ratio was 129.4% at November-end.