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Defence union puts pressure on ABP about pension plan change

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A union of Dutch defence staff has suggested it would take civil service scheme ABP to court if it were to change its articles of association to enable it to unilaterally change pension arrangements of military and civilian personnel at the country’s Ministry of Defence (MoD).

In a letter, published in the magazine of GOV/MBH, the union for officers as well as high- and mid-ranking civilian staff, pensions lawyer Mark Heemskerk said ABP’s plan was “not acceptable and in violation with legislation”.

The €389bn pension scheme wants to change the pension arrangements for MoD staff from final salary to average salary, arguing that providing the final salary plan – currently the single exception within the pension fund – was too complicated.

When asked by IPE, ABP said it had been seeking solutions for simplifying the complexity of the pension plan for defence staff since the summer of 2016, but indicated it could not comment any further. 

However, the minutes of a meeting of the scheme’s accountability body confirmed that “if consultation would not result in an agreement, ABP’s board would have to prepare an adjustment of the articles of association”.

According to sources, ABP’s board was considering a compromise proposal to implement a simplified final salary plan next year.

In this scenario, the social partners of employers and workers would have until October 2018 to come up with an agreement for an average salary plan.

The union indicated that it needed more time, as the introduction of average salary arrangements also required changes of the salary structure of defence staff.

Young participants would accrue more pension rights early in their career but would initially lose out on net income, while higher-ranking military staff could lose up to 20% of their pension, it argued.

This has been an issue since ABP switched from final to average salary plans in 2004 for most of its civil servant participants.

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