A regional court in the Netherlands has ruled that Aon is not obliged to cover the funding gap at its Dutch pension scheme if its ‘works council’ (OR) continues to resist plans to relocate the fund to Belgium.
Local financial news daily Het Financieele Dagblad, citing the as-yet-unpublished verdict, said the Rotterdam court decided that covering funding shortfalls was not part of the actual pensions contract, on which the work council has the right of approval.
Aon’s OR has opposed the company’s plan to move the pension fund to Belgium due to governance and regulation concerns.
The company said it would stop meeting any funding gaps if the OR persisted in resisting the move.
In Aon’s pension plan, contrary to many other company schemes in the Netherlands, an additional contribution is not mandatory but a part of the contract for provision.
According to the FD, the court sided with Aon’s position that the contract for pensions provision was not subject to the OR’s right of approval.
Aon’s OR could not be contacted for comment.
René Mandos, chairman of the Aon scheme, previously argued that the Belgian option would be the most beneficial for the pension fund’s participants.
The court ruling comes as Jetta Klijnsma, state secretary for Social Affairs, tables a Bill to grant ORs right of approval for cross-border moves.
In such cases, pension arrangements would become subject to another supervisory framework, which would alter the pension plan, she said.
The concept legislation focuses on the pension contract rather than the pensions provider.
It will not, however, affect arrangements made as a result of negotiations between employers and workers, such as those for mandatory sector-wide schemes, Klijnsma said.