E.ON has established a pension fund to centralise and consolidate its existing company pension schemes, with plans to take over Innogy pensioners from the Willis Towers Watson (WTW) pension fund following approval from BaFin.

The E.ON Pensionsfonds will have an initial portfolio of around 10,000 Innogy pensioners and around €2.5bn in security assets, joining the ranks of some of the largest German company pension funds.

WTW previously acted as a deal enabler for the group by making its pension fund platform available as part of E.ON’s takeover of the Innogy group, initially taking over the pension portfolio from the RWE Pension Fund in December 2019.

WTW stated that the close interlinking of the corporate transaction and portfolio transfer in accordance with Section 13 of the Insurance Supervision Act (VAG) enabled the transaction to close almost to the day.

Indeed, WTW head of legal/tax/accounting and financing vehicle retirement, Dr Michael Karst, highlighted the concurrent approval of the antitrust authorities and BaFin as having made the portfolio transfer "the most complex in the German pension fund market to date".

WTW emphasised, however, that the direct connection of the previous administrative structures to the WTW Pension Fund allowed for maximum continuity with regard to operational and administrative processes, despite the “considerable size” of the portfolio.

E.ON Pensionsfonds CEO and E.ON head of pension finance and asset strategy, Stefan Brenk, said: “True to the motto 'after the project is before the project', parallel to the closing of the Innogy transaction, we initiated the establishment of the E.ON pension fund in order to finally be able to take on the Innogy pensioners here.

"The E.ON pension fund enables the further consolidation and centralization of company pension schemes in the E.ON Group - in terms of replacing other financing vehicles as well as against the background of modern pension plan designs.

"The same applies to the investment governance behind the financing vehicles and the investment management itself. This is what makes the E.ON pension fund so important to us."

WTW head of retirement Germany and Austria, Heinke Conrads, added: “We are pleased that we were able to contribute to the success of the transaction with both the inclusion of Innogy pensioners in the Willis Towers Watson pension fund and the long-term transfer to the E.ON pension fund. We can also closely accompany the E.ON pension fund on its way.”

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