NETHERLANDS - The €270m Dutch pension fund of the energy company Total is to abandon its ambition to grant delayed indexation as part of an extensive overhaul of its retirement arrangements.
Instead, Total Pensioenfonds Nederland may grant additional indexation once the scheme's financial buffers have recovered, it said.
The scheme added that its ambition for the regular indexation - depending on the yearly return on investments - was now 25% of the general salary index at its Zeeland Refinery, and would apply to all its 1,300 participants.
The fund said it also intended to replace its final salary arrangement with a career average scheme.
Additionally, it intended to raise contributions by 8.2 percentage points to 30.9% of the pensionable salary, with the employer raising its contribution to 23.2%.
Total Pensioenfonds Nederland also said that any surplus contribution would be deposited for its active participants, rather than be added to the general reserves for indexation.
Currently, the Total pension fund has a funding shortfall of 6.5 percentage points, and is implementing a recovery plan to improve its coverage ratio to the required minimum of 104.2% by the end of 2013.
If the scheme's financial position has not improved by the end of 2012, it expected to cut pension rights by 2.2%.
However, it stressed that its plan to change its pension arrangements was entirely separate from its recovery efforts.
The pension fund's participants will decide on the proposed pension arrangements in a ballot set to take place this month.