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ABN Amro and unions sign pension accord

NETHERLANDS - Dutch banking unions have signed an accord with ABN Amro to investigate ways of cutting pension costs.

The move is part of the bank's new collective labour agreement that it presented to the labour unions FNV Bondgenoten, De Unie, Dienstenbond CNV and BBV on September 26. The deal has now been accepted by the unions.

"Parties agree that there is an imbalance in the ratio between pension costs and salary costs," says the text of the new agreement.

"Parties wish to restore the balance in this ratio. The cost reduction necessary for this purpose must be realised by adjusting the pension scheme and/or by a different distribution of the pension costs between the bank and employee."

Under the terms of the agreement, a study will be undertaken to achieve cost reductions. "The outcome of the study will be implemented from January 1 2005."

The new agreement, valid until June 1 2004, will see salaries rise 2.5% from November 1 2003. Pending the results of the study, the bank said that half of this increase will lead to the indexation of accrued pension rights.

"This means that the 2.5% increase will be fully included in the pensionable salary and that the pension rights already accrued will be adjusted by 1.25%.

"Accordingly, pensions already in payment will be increased by 1.25% on the basis of the pension arrangements applicable before 2000."

The bank also said that the link of pensions in payment and dormant pension rights in the former labour agreement would be cancelled. "This means that the bank will not bear the cost of indexation if the pension fund is unable to apply indexation."

In its 2002 accounts the bank made a 880 million-euro provision for pension obligations; its pension fund is valued at five billion euros.

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