SPF, the €14bn pension fund for railways in the Netherlands, and SPOV, the €3.4bn pension fund for public transport, have confirmed they are to merge next year.

SPOV said in its 2015 annual report that had become increasingly difficult to find board members in the sector.

It also cited increasing costs, complexity and legal requirements. 

SPOV said it was large enough to remain independent but that growth was essential to manage the scheme efficiently.

Both pension funds are assessing how pension arrangements can be matched and the funding gap bridged, according to Jan Heilig, vice-chair at SPOV.

As of the end of April, SPOV’s coverage was 102%, while funding at SPF stood at 104%.

A spokesman for SPF Beheer – owned by SPF and the provider for both schemes – added that a merger could also be a tax benefit for SPOV.

SPF, being the owner, does not have to pay tax to SPF Beheer. 

This benefit could also apply to SPOV’s participants after a merger, he said.

SPOV said the alternatives to a merger would include carrying on independently while extending its scope to public transport in the larger cities in the Netherlands, or merging with Vervoer, the €19bn sector scheme for private road transport.

In its annual report, SPOV’s accountability body (VO) noted that the public transport scheme’s costs were 20% above average, due in part to SPF Beheer’s relatively limited scale.

SPOV’s VO also indicated that the quality of pensions-administration data at SPF Beheer was not up to scratch and that correcting the problems had required an externally checked and monitored action plan, although the scheme’s board said the problems had been resolved and that any errors had been corrected in favour of participants – albeit not retroactively.

The VO said a self-assessment on data security had revealed 33 areas for improvement, with SPF Beheer also falling short of the respective supervisory norms for 16 out of 54 management measures.

It also noted that SPF Beheer’s entire executive board had been replaced within a year, with its chief executive Albert Akkerman retiring, CFRO Saskia Slijboom moving to insurer ASR and CIO Marcel Andringa leaving for metal scheme PME.

They have been succeeded by Edwin Kreikamp (ASR), Martin Mos (A&O) and Justus van Halewijn (Achmea), respectively.