The professional pension funds for lawyers in Lower Saxony and Bremen are set to merge to create a €3bn institution, an uncommon step in a sector characterised by fragmentation.

The merger of Hanseatische Rechtsanwaltsversorgung Bremen and Rechtsanwaltsversorgung Niedersachsen is scheduled to take effect on 1 January 2027, according to the Lower Saxony pension fund.

The combined institution will operate under the name Rechtsanwaltsversorgungswerk Niedersachsen/Bremen, the fund added.

Under a treaty signed by the two federal states in June, the Bremen scheme will transfer its assets and members to its Lower Saxony counterpart “by way of universal succession”.

The merger aims to simplify administration, reduce costs and create investment synergies, according to the treaty.

Full-scale mergers of professional pension funds remain an “exception”, said Uwe Rieken, founder and managing partner of Faros Consulting.
Consolidation in the sector is “gradual”, driven by fixed costs, including audits and internal reviews, as well as illiquid investments that require scale and specialist expertise, he added.

The need for stronger governance and risk management following investment losses, such as those experienced by Berlin’s dentists’ pension fund, is another driver.

Political pressure arising from debate over a universal, employment-based social insurance system is also encouraging consolidation, according to Rieken.

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