ABP and defence unions in court over ‘complicated’ final salary plan

The €418bn Dutch civil service scheme ABP and the defence trade unions are at loggerheads, as the pension scheme no longer wants to implement “very complicated” final salary arrangements for military personnel.

According to daily newspaper FD, the unions brought summary proceedings against the pension fund on Monday, demanding that it continue to provide a final salary plan as long negotiations about new average salary arrangements were incomplete.

Last week, the unions summoned the Dutch Ministry of Defence (MoD) to court. The employer wanted to get rid of the expensive final salary plan, insisting that a previous agreement with the unions about changing the scheme was valid.

The FD quoted ABP as saying that it needed to manually calculate part of the military staff’s pension, but so many mistakes were made that regulator De Nederlandsche Bank had threatened to impose sanctions on the pension fund.

René Maatman, the scheme’s lawyer, argued that the mounting problems were about to cause a “short-circuit within ABP’s administration machine”.

The MoD’s final salary plan is one of the last remaining in the Netherlands, and is complicated in part as a result of new legislation based on average salary arrangements.

The FD said ABP’s efforts to calculate the pensions of military staff – who account for 5% of ABP’s total membership – “have become unbalanced at the expense of all other participants”.

Last year, the MoD and the unions seemed to have reached an agreement about abolishing the final salary plan next year, but the negotiations between the two players stalled last autumn.

However, ABP said that it had no other option than to start implementing average salary arrangements as of 1 January, as it no longer wanted to improvise carrying out the final salary plan.

On Monday, Mark Heemskerk, the unions’ lawyer, argued that ABP could not unilaterally change the pension arrangements “just because they were complicated and it didn’t have its administration in order”.

Heemskerk said only the social partners could change the pension plan, according to the FD.

ABP, for its turn, contended that the pension fund had the duty to assess whether the agreements were feasible, and had to decline if this wasn’t possible. “This point has been reached,” it said.

Both parties also quoted IT experts arguing in favour of their respective cases.