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Netherlands roundup: ABP completes nuclear, tobacco divestments

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The €409bn civil service pension fund ABP completed the divestment of €4bn worth of holdings in nuclear arms manufacturers and tobacco producers in 2018.

The divestment included all subsidiaries and companies in the supply chain, it added.

The scheme said it had re-invested the proceeds worldwide and spread across several sectors. 

At the start of last year, ABP announced that nuclear arms and tobacco no longer matched its aim to invest sustainably and responsibly.

It added that it expected the investments would not continue to deliver solid returns in the future.

In May, ABP revealed that it had hit its target for reducing the carbon emissions of its portfolio assets two years earlier than planned.

Cigarettes

ABP has sold billions worth of nuclear and tobacco company stock

Unions threaten strike action over pension demands

Dutch trade unions have issued an ultimatum to the government demanding concessions in line with earlier calls made during last year’s negotiations over pension system reforms.

In a letter to social affairs minister Wouter Koolmees, unions FNV, CNV and VCP threatened industrial action if the government refused to honour their demands.

The unions want the government to freeze the retirement age for the state pension (AOW) at 66, introduce mandatory pension saving for self-employed workers, and relax the rules around pension schemes’ inflation-linked compensation.

Wouter Koolmees

Credit: Mark Prins

Wouter Koolmees, social affairs minister

They also want the government to drop financial sanctions on individuals taking early retirement and to prevent cuts to pension rights.

Koolmees, who has already published a letter outlining his view on how to continue with the current pensions system, said he would thoroughly assess the ultimatum.

He said he didn’t have plans to force through changes without involving the unions.

Retail and food sector schemes raise premiums to boost funding

The Dutch pension funds for the retail and food sectors are to raise contributions and reduce annual accrual rates in 2019.

Both schemes said their goal was to increase their premium’s coverage of liabilities relative to the discount rate.

The €20bn retail sector scheme (Detailhandel) said it wanted to increase its contribution from 21.6% to 22.6% of the pensionable part of the salary, while aiming at an accrual rate reduction from 1.62% to 1.56%.

The €6bn scheme for the food industry (Levensmiddelen) said it intended to raise premiums from 20% to 20.6%, and to decrease accrual from the maximum tax-deductible level of 1.875% to 1.768%.

Detailhandel said that its premium covered 87% of liabilities, a percentage that was meant to rise to 95% next year.

For Levensmiddelen, its current premium coverage of 77% of liabilities was to rise to 85%.

At November-end, the funding ratio of Detailhandel and Levensmiddelen stood at 109.8% and 102.3%, respectively.

Bart Onkenhout, director of the food industry scheme, said that the measure had been triggered by an asset-liability management study last summer, which had suggested that the premium’s coverage of liabilities was unlikely to improve.

Recently, the €72bn metal scheme PMT announced that it also wanted to raise its premium coverage above its existing level of 80%. However, it must wait until 2020 when the five-year agreement between employers and trade unions expires.

The social partners at ABP agreed in 2016 to a phased contribution increase in order to boost the proportion of funding covered by premiums.

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