Bikudak to merge with €37bn pension fund for Dutch building industry

NETHERLANDS – Bikudak, the €390m industry-wide pension fund for the Dutch roofing sector, is to join bpfBOUW, the €37bn scheme for the building industry, on 1 January 2014.

As of this date, bpfBouw’s pension arrangements will apply to most of Bikudak’s 4,000 active participants and the 16,000 deferred members.

The building scheme will also pay the benefits for Bikudak’s 1,500 pensioners.

According to Bikudak, joining bpfBouw was logical in “such times of scaling up and limiting costs”.

Bikudak’s board said bpfBouw’s “more comfortable” financial position was likely to decrease the odds of a rights discount and increase the likelihood of indexation.

It also argued that joining the large scheme would lower costs, leaving more assets for pensions.

However, Bikudak reported asset management costs of 45 basis points in 2012, while bpfBouw spent 50bps over the same period.

The schemes disclosed transaction costs of 10 and 8bps, respectively, and said their implementation costs were €221 and €101 per participant.

According to Frank van Esch, account manager at pensions provider APG, the differences between the pension arrangements of both schemes were limited.

“Only for the office staff at Bikudak – whose pension plan is less generous, with also a lower contribution – a two-year transitional period will apply,” he said.

He added that the early retirement arrangements of Bikudak’s participants would also be transferred to bpfBouw.

At September-end, Bikudak’s coverage ratio was 105%, while bpfBouw reported a funding of 106% at the end of August.

Bikudak and bpfBouw returned 16.9% and 15.3% on investments, respectively, in 2012.