Former telecoms firm Alcatel-Lucent’s Dutch pension fund is set to be in liquidation for another four years, according to the scheme’s annual report.
Alcatel-Lucent Pensioenfonds is set to continue until 2023, despite the scheme being in liquidation since 2015, while the employer – Nokia Solutions and Networks Netherlands – makes a series of recovery payments.
The payments follow a settlement between the pension fund and the employer in 2017, details of which haven’t been disclosed.
The resolution followed several court cases, initiated by the scheme, seeking financial compensation for the sponsor’s decision to cancel the contract for pension provision with the pension fund.
In 2011, when the contract was terminated, the Alcatel-Lucent Pensioenfonds had a funding shortfall.
As part of the settlement, the sponsors paid the pension fund €9m in 2015, €5.7m in 2016 and €12.7m in 2017. Last year, the employers contributed €2.7m in recovery payments.
In October 2015, the Alcatel-Lucent Pensioenfonds transferred its €700m of pension assets to PME, the €50bn sector scheme for metal-working and electro-technical engineering.
At the time, its funding level was approximately 97.5%, whereas PME’s coverage ratio stood at approximately 100%.
Since 2015, the Alcatel-Lucent scheme has been a pension fund without liabilities, largely responsible for transferring the sponsor’s contributions to PME.
According to the pension fund, the last recovery payment is due in 2023, when its assets – currently €24m – will be used to pay inflation-linked compensation for its participants who transferred to PME.
The amount of recovery payments in the coming years would depend on the development of interest rates as well as the coverage ratio of the metal industry scheme, the pension fund said.
Assets held by the Alcatel-Lucent Pensioenfonds have been placed in savings accounts with banks.
Future accrual for workers was outsourced to Blue Sky Group in 2012.