If the proposed pensions merger between engineering pension funds ISP and DIP and the lawyers' and economists' fund JØP is finalized, AP Pension will lose DKK 16 billion (EUR 2.1 billion) of its assets under management, according to Danish business daily Børsen. ISP members' assets currently managed by AP Pension total more than DKK 16 billion. The remaining capital that AP Pension manages totaled around DKK 100 billion in mid-2017, Børsen writes.
The CEO of AP Pension, Bo Normann Rasmussen, told the newspaper that he focuses on the fact that the merger between ISP, DIP, and JØP is not until 2020. "We are pleased that the cooperation between AP Pension and ISP is so strong that the merger between DIP and ISP is not being rushed. There may be many changes in the pension landscape by 2020 and if it is relevant by then, we would like to re-enter a negotiating position," he writes in an e-mail to Børsen.
According to Thomas Damkjær Petersen, president of the IDA engineers' association, who has been pushing for the two engineers’ pension funds to merge, Bo Normann Rasmussen should not expect changes to the plans over the next two years, Børsen writes.
The betrothal between the two engineering pension funds is still in place, but the wedding has been postponed to 2020. This is due to the fact that ISP and DIP together with IDA have not been able to agree on a final merger agreement, but they have instead signed a letter of intent. This agreement states that a merger between DIP and JAP must be finalized before the merger between DIP and ISP can take place.
"When the merger between DIP and JØP is finalized, we will begin work on the subsequent merger with ISP. The criteria for this is that the expected potential of the mergers, in the form of cost savings for example, can be realized. The subsequent merger is expected to be final with effect from Jan. 1, 2020," the agreement reads. Thomas Damkjær Petersen is pleased with the outcome of the negotiations. "I am satisfied. We have reached an agreement. We are working towards a merger between three pension funds, and I am very pleased with that. All three parties are in," he says to FinansWatch.
English Edit: Marie Honoré