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Aegon pushes for DC switch for Dutch staff

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Insurance company Aegon is negotiating with trade unions about a switch from its current defined benefit (DB) pension plan for Dutch workers to defined contribution (DC) arrangements.

According to De Unie, the unions have demanded compensation for the shift of risk from the employer to the 3,800 workers involved.

Aegon said that it had started negotiations as the current implementation contract for the pension plan – insured with the sponsor – is to expire at the end of this year.

“Continuing the pension scheme under the current market conditions would lead to a disproportionate cost increase,” said a spokesman for Aegon.

Together with the unions CNV and FNV, De Unie had concluded that the options for an alternative were limited, as establishing a company pension fund would be too expensive given the requirements for financial buffers.

This also applied to the option to join a general pension fund (APF), De Unie added.

The union said that, if average salary arrangements were to be kept, joining an industry-wide pension fund such as the non-mandatory SBZ would be the only realistic option.

However, this would not be acceptable to Aegon, as the employer has insisted on implementing the pension plan itself.

A sector scheme would not be able to guarantee the pensions either, the union said.

That would leave Aegon’s preferred alternative of a DC plan as the only option.

According to De Unie, the topics it wanted to discuss – the target pension and Aegon’s budget – were not part of the negotiations, as the insurer did not want to increase its current pension costs.

De Unie indicated that the discussions focused on compensation for risks shifting to the employees. Unions have already declined an initial proposal from Aegon.

The insurer said it expected that negotiations could be completed by the end of September.

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