Vlakglas, the €750m pension fund for the window pane manufacturing industry in the Netherlands, and Groothandel, the €854m scheme for the wholesale sector, have said they want to merge on 30 June. 

The new and as-yet unnamed pension fund aims to increase its assets under management to €5bn and its total number of active participants to approximately 25,000 by attracting other smaller industry-wide schemes, according to Jacques van de Vall, independent chairman at Vlakglas.

He said his scheme was among those the pensions regulator (DNB) had recently deemed “potentially vulnerable”.

Van de Vall added that the board of the merged scheme would consist of the current trustees of Vlakglas and Groothandel.

It will be tasked with fleshing out how other pension funds should be approached and decide on a governance model.

Van de Vall said any future board structure must guarantee that joining schemes have a say in board affairs.

He added that the merged scheme’s target scale of €5bn would be the optimal size, “as asset management costs don’t fall further if assets increase”.

He estimated that administration costs per participant would be approximately €85 at the envisaged scheme, the usual level at the larger industry-wide pension funds in the Netherlands.

Van de Vall said several industry-wide schemes were potential merger partners, as they had “common ground” with Groothandel.

Both Vlakglas and Groothandel have outsourced administration to pensions provider AZL, with Vlakglas’s contract terminating at the time of the intended merger.

However, the agreement with Groothandel is to expire after two and a half years.

“Whether we will stay with AZL depends on the outcome of the negotiations,” Van de Vall said.

The largest part of Groothandel’s assets has been reinsured with Aegon and Nationale Nederlanden.

The scheme is managing €56m in-house. 

Groothandel has 5,335 active participants, 5,013 pensioners and approximately 20,000 deferred members.

As at the end of 2013, these figures for Vlakglas were 5,270, 3,765 and 14,590, respectively.

The merger partners have 353 and 409 affiliated employers, respectively.