The €256m Dutch pension fund of Co-op supermarkets is to liquidate and place its pension arrangements with Levensmiddelen, the €5.1bn sector scheme for the foodstuffs sector.
As funding of the Co-op scheme is much higher than that of Levensmiddelen, its participants will get financially compensated during the coming years, according to a document on the supermarket group’s website.
It explained that the collective labour agreement (CAO) between employer and workers for the supermarket chain prescribed the pension fund to join the industry-wide scheme in case of liquidation.
The Co-op scheme closed the year 2016 with a funding of 112.4%, whereas the much larger sector pension fund’s coverage stood at 95.9% at year-end.
The participants of the Co-op pension fund will get compensated for the difference through an indexation in arrears of 1.45% over 2016, as well as an annual indexation of 3% as long as the transition surplus exists.
In addition, their annual pensions accrual will be increased from 1.64% of their salary to the tax-facilitated maximum of 1.875%, according to the pension fund.
However, as part of the transition, the maximum salary subject to pensions accrual at Levensmiddelen is to be reduced from the legal maximum of €101,519 to €53,701.
In 2015, the Co-op pension fund placed its pensions provision with Syntrus Achmea, which is also the provider for Levensmiddelen.
The latter scheme, however, has indicated that it wanted to switch to AZL – part of NN Group – following Syntrus Achmea’s announcement last year that it would stop serving industry-wide pension funds within two years.
The Co-op pension fund has 7,000 participants in total.