NETHERLANDS - Supermarket chain Jumbo has failed to meet its contractual obligations by refusing to help plug a €450m shortfall at pension fund Super de Boer, according to union FNV.

Jumbo acquired the Super de Boer supermarkets in 2009 and, according to the pension fund, make a commitment to "maintaining its connection" with the scheme, including its existing pension arrangements and its recovery plan.

In July 2011, the pension fund presented a new recovery plan, providing for a €6.7m recovery contribution by the employer, in addition to the €1.1m that Jumbo had already paid following the old recovery plan.

Participants were to contribute to the recovery through a 0.2% rights discount.

However, the scheme's deficit has ballooned to €23m, which could lead to a rights cut of at least 7%, according to Murat Sekerçan, the FNV's representative.

The pension fund reported a coverage ratio of 94.2% at the end of May.

In 2009, previous employer Super de Boer granted its pension fund an interest-free loan of €10m to help improve funding - approximately 86% at the time - to the required minimum level of 105% within five years.

At the time, union representatives claimed that Super de Boer had already refused to contribute €25m requested by its pension fund, and had insisted there should be a pension rights reduction.

The Pensioenfonds Super de Boer was effectively the pioneer of liability-driven investments (LDI) in pensions, when it introduced the concept in 2005.

However, this strategy was also its downfall in 2008, as interest rates fell further than fixed income investments, while investments in the scheme's return portfolio took a negative turn.

The pension fund was unavailable for comment at the time of going to press, while Jumbo said merely that the parties were "in consultation".