De Unie, in your interest

Your collective labor agreement and industry

NN Group – Pension plan

November 15 2021

A large majority of members have agreed to the temporary adjustment of the pension scheme. This is in accordance with the proposal of De Unie. I, advocate Inge de Vries, am pleased with the support of the members. Members of other trade unions have also agreed. As a result, the addendum will become formal and the pension scheme can be implemented in 2022.

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Many members have filled in the comment box of the voting form. Partly because they had a question, partly to give an opinion about the pension scheme or about the employer. In addition, several members indicate that they are prepared to pay more pension contributions.

This has provided a lot of information, pensions will be an important topic in the coming period. I will answer the questions below, perhaps other members have the same questions.

Answer questions

  1. This proposal gives me the feeling that people want to hide a discount under the carpet by suddenly adjusting the level of ambition.
    Answer: It was not my intention to cover up the build-up discount. The accrual for 2022 is 1,5%. So again a big discount. The problem was that the pension fund refused to implement the pension scheme if the parties maintained the ambition level of 1,875% in the scheme. The pension fund board invoked guidelines from DNB. I have not been able to verify whether this appeal is justified. The request of the parties to the collective labor agreement to the pension fund board to have a joint meeting with DNB was rejected by the fund.
    Letting go of the ambition of 1,875% is very disadvantageous for the employees. If you switch to a new pension scheme based on a flat rate, employees who are disadvantaged as a result must be compensated. The government intends to have this compensation calculated on the basis of the ambition level of the scheme. Lowering the ambition level so close to the transition could therefore be very disadvantageous. Hence our agreement to set the ambition level back to 1% on 2021 October 1,875.
  1. I think we now have a defined contribution plan at NN, so no guaranteed benefit, lower accrual, benefit at retirement age lower and uncertain.
    Answer: The current scheme is a CDC scheme. A collective defined contribution scheme with a maximum premium of 30%. The pension agreement states that it is a benefit agreement. The pension fund therefore acts as if it were an average pay scheme with a benefit, which is promised on the basis of the annual accrual. However, according to international accounting rules, it is a defined contribution plan, which means that NN does not have to include the pension entitlements on the balance sheet.
  2. In itself it is special that the economy is running so well, the stock markets are doing well and that the returns/construction are not achieved.
    Answer: the pension fund must work within the frameworks set by the DNB, the FTK. You will find information about this, among other things: here. It is important here that, in determining the accrual and payment, the pension fund must calculate with interest projections, not with the expected return.
  3. Provided Pensioenfonds also accepts that this addendum is indeed strictly limited to this 9-month period.
    Answer: The addendum has indeed also been coordinated with the pension fund. It must also be part of the implementation agreement. The pension fund has announced that if the circumstances are equal on 1 October 2022, they will again be unable to implement the pension scheme if the ambition level of the scheme deviates from a realistic accrual percentage for the fund.
  4. Is it logical that the AON logo is mentioned above the addendum?
    Answer: My apologies, I assume that the addendum that we will sign shortly will be printed on NN Group letterhead. Aon is the employer's advisor, they have drawn up the text on which we eventually reached agreement.

Opinion about NN Group

  1. “It's unbelievable that a large pension company that wants to set an example for the Netherlands leaves its own employees out in the cold. Does not give any confidence for the future.”
  2. “I think it is unworthy of NN, as the market leader in pension insurance, to treat staff pensions in this way. This would mean a substantial reduction for the 3rd year.”
  3. “Prices are going up, wages are not allowed to go up and my pension is going down. That shows no appreciation from an employer.”
  4. “It is precisely as a financial services provider that NN should manage its affairs better than average and set an example in the market for its customers.”
  5. “Employer contribution can certainly be increased. NN Group is in number 3 of the Elsevier Top 500 of largest profits.”

Opinion on pension scheme

  1. “I understand the problem, but I don't think it's up to the pension provider to take a position here and enforce an addendum.”
  2. “Would have preferred that we switch to full DC with staffel.”
  3. ”But quickly switch to a defined contribution scheme.”
  4. “The fact that NN is once again unwilling to temporarily raise the premium at least slightly, while that premium was absolutely too limited for the ambition level of 1,875%, leading to a build-up discount over the last two collective labor agreements, which makes us fear the worst for the future.”
  5. “With regard to regulation 1-7-2019, the ambition from 2020 has already not been achieved, so we are just muddling through.”

Additional information

The agreement to extend the current pension scheme by 9 months, until October 1, 2022, has been made because the parties to the collective labor agreement want a better solution before 2023.

It is not certain whether we can then switch to a pension scheme based on a flat contribution, as prescribed in the pension agreement. The government is not expected to have the legislation ready for this in time before 1 January 2023. We may have to temporarily agree on a defined contribution scheme as an intermediate step.

However, if the parties to the collective labor agreement cannot reach an agreement, then there is no other option than to enter into consultation with the pension fund again to extend the current pension scheme again. The pension fund has limited options for increasing pension accrual, but has so far refused to do so. They may be prepared to do so in other circumstances.

If it becomes clear after the summer that we have no other option than to continue the current pension scheme, I will again present the choice to the members as to whether they are prepared to pay a higher contribution. A small number of members now indicate that they are prepared to do so. We have not opted for this now because in the members' consultation this spring the majority indicated that they did not want to pay a higher premium.

Contact

Do you have any questions regarding this message? Then contact me. You can reach me by sending an email to: inge.de.vries@unie.nl or call me on 06-5252 2091.

 

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