NETHERLANDS - Dutch industrial group Akzo Nobel says it will make a €300m shift to defined contribution pensions to align it with the new Financial Assessment Framework, or FTK.

The Arnhem-based coatings and chemicals group said the move comes after an agreement with unions. The new DC scheme starts today.

“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),” the company said.

It will make a top-up contribution of around €150m and provide a €100m subordinated loan to “ensure a solid start for the new scheme”. And it will pre-finance employee premiums to the tune of €50m.

“I’m very pleased with the outcome of the negotiations for all concerned,” said chief financial officer 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. 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 Nederland director Rob Prins 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.