NN Group: Collective Labor Agreement negotiations
to April 14, 2022
The collective labor agreement negotiations at NN still revolve around pensions and a structural salary increase. The subject of pensions has been submitted by the parties to the collective labor agreement with a joint working group.
The pension working group recently issued advice to the parties to the collective labor agreement. The pension working group has conducted a study in recent months into alternatives to the current pension scheme. The trade unions have actively participated in this, many members have been complaining for some time about the accrual discounts that the NN CDC Pension Fund has to implement as a result of the low interest rates and the strict rules of DNB.
Development of legislation
A pension agreement was concluded in mid-2019 between the cabinet, employers and vakbondand. This agreement had to be converted into legislation. At the beginning of this month, the bill for the Future Pensions Act was sent to the House of Representatives. The intention is that this law can come into effect on 1 January 2023, so that pension funds have switched to one of the two new pension contracts between 1 January 2023 and 1 January 2027 at the latest.
The current pension scheme will expire on September 30, 2022. The working group has investigated alternatives to the current pension scheme. The working group has worked out various options, looking at both the content of the scheme and the desired implementer. For the content of the scheme, an attempt is made to align with the new Future Pensions Act.
In the Future Pensions Act, the starting point is a defined contribution scheme based on a flat contribution. The current pension scheme is a benefit scheme (the level of the pension benefit is promised) and the pension contribution is based on a progressively accruing scale (the older you get, the higher the pension contribution that is saved for you). As a result, you need compensation if you switch to a flat graduated scale. Older employees in particular suffer differently.
Advice from the pension working group
The final advice of the Pension Working Group is twofold: A fallback option is to continue the current pension scheme for one or two years. The interest is now rising, which means that there is a chance that the pension accrual may be higher in 2023 (depending on the interest rate on September 30 of this year).
If the parties to the collective labor agreement choose to change the pension scheme now, a defined contribution scheme at Be Frank is the best option. NN is then prepared to pay the costs for compensation, the amount still to be negotiated. The parties to the collective labor agreement must then make proper agreements about the pension accrued in the NN-CDC fund.
April 13 meeting has been canceled
The parties to the collective labor agreement must now discuss the advice of the pension working group and take a decision on this. A next collective labor agreement meeting was scheduled for April 13, 2022. We had to cancel this meeting for a number of reasons.
The main reason is that in the pension field there are now developments in various collective labor agreements that lead to discussions within the trade unions and the need for coordination. It has been agreed in the pension agreement that in future pensions will take place more on an individual basis. In the old system there is a great dependence on the market interest rate, which is why many pension funds, just like us, have accrual discount. The very low interest rates of recent years have proved disastrous for the current system. This dependence is reduced by switching to a more individual pension. Taking more account of the returns of the investment policy (shares, bonds, real estate, currencies) is a solution that creates a more realistic picture between assets and distribution obligations, which is currently expressed in the concept of funding ratio.
Flexible or solidarity
Under the new pension legislation, there are still two types of pension, the flexible and the solidary contract. The flexible is more individual and has options, the solidarity is also individual, but does involve risk sharing. It is still difficult to make a choice between the two because the legislation has only just been submitted to the House of Representatives. The survey, by the joint pension working group, showed that NN employees actually want the ''best of both worlds''. That is actually not possible. No conclusion can be drawn from the survey as to what the supporters really want.
In the pension market in the Netherlands, we see that choices are now being made at various collective labor agreement negotiation tables that make a switch to the flexible or solidary contract impossible in the future. The trade unions wonder what consequences this will have for future negotiations.
We hold close consultations with NN, and we also want to keep our negotiating partner well informed about the dilemmas we face. We aim to have more clarity within two weeks and to be able to continue the negotiations. We realize that in view of the long distance that has already been covered, additional delays are not desirable. Everyone wants more clarity about a collective labor agreement result.
If you have any questions or comments about this message, please contact the representative Inge de Vries. You can reach her by sending an email to: email@example.com or app to telephone number 06-5252 2091, she will then make an appointment with you.