The new defined contribution approach is the result of a two-year process carried out in full alignment with the requirements of the new Dutch financial reference framework (nFTK).
“I’m very pleased with the outcome of the negotiations for all concerned,” said Akzo Nobel CFO Rob Frohn. “Fluctuations in the pension fund due to market circumstances have had too much influence on the Company’s balance sheet and results. By moving to a defined contribution scheme—which starts on July 1, 2005—we will pay a fixed annual premium.”
Continued Frohn: “We want a healthy, well managed pension fund and to that end we will make a substantial cash contribution in order to kick-start the new set-up.”
Akzo Nobel will make a top up contribution of some EUR 150 million and provide a subordinated loan of EUR 100 million, which should ensure a solid start for the new scheme. In addition, the Company will pre-finance employee premiums for an amount of EUR 50 million.
Rob Prins, Director of Akzo Nobel Nederland, added: “This new scheme meets the requirements set out by the regulators and addresses the interests of all the participants in the fund. I’m delighted that together with the unions, we have not only concluded the recent collective labor agreement, but we have also gone a long way towards achieving a solid footing for our pension scheme over the coming years.”
The new pension scheme is subject to approval by union members and the relevant regulatory authorities.