Stork pension scheme thinking to join Dutch giant PME
NETHERLANDS - The €2.7bn pension fund of industrial conglomerate Stork has said it is considering joining the €24bn industry-wide scheme for the metal and electro-technical engineering industry PME.
Established in 1881, the Stork scheme - with 38 affiliated companies - is one of the oldest pension funds in the Netherlands and has been exempted from the mandatory participation in an industry-wide scheme.
"However," chief executive Eric Uijen explained, "since the Stork group has been de-listed some years ago, several of its parts have been sold, but they are still participating in the Stork scheme, which has become a kind of miniature industry-wide pension in itself.
"In addition, parent company Stork has become increasingly worried about the current pension arrangements, which mean the participating companies must fully fill in any shortfall at the pension fund.
"Moreover, new governance legislation has made it increasingly difficult to find sufficient capacity within the affiliated firms for all committees and councils of the pension fund."
Uijen said the decisive factor for a merger would be the cost of changing the pension plan, by shifting risks away from the companies to the scheme's participants.
"Joining PME can't happen at the expense of our participants," he said.
Uijen said no time limit had been set for the consultation process.
The Stork pension fund still carries out its administration, as well as the management of its fixed income portfolio.
The Amersfoort-based Stork scheme has a coverage ratio of 99.3%, whereas PME's funding was 96% at the end of January.
Both pension funds reported returns of 12.4% over 2010. Neither granted an indexation for 2011.