The €1.3bn Dutch Nedlloyd Pensioenfonds is to stop offering its individual defined contribution (DC) plan as of 2020.
In its annual report for 2017, the pension fund explained that the DC arrangements would not remain viable because of the limited take up by employees.
The company scheme for the Dutch workers of Danish shipping firm Maersk introduced the individual DC plan for the employees of the company’s six subsidiaries in the Netherlands in 2015, and has attracted roughly 480 participants.
At the time, Nedlloyd was among the first Dutch schemes to offer members the option of converting part of their accrued pension rights into pension claims at from the scheme’s collective DC pot.
Since 2015, the participants have accrued €10m under the individual DC arrangements.
Nedlloyd said it had hoped to attract other Maersk subsidiaries in the Netherlands to join the individual DC plan, which was operated by the pension fund with assets run by Robeco.
The number of members in this part of the scheme was too low to achieve benefits of scale, Nedlloyd said.
The pension fund added that it was not yet sure that the assets accrued in the individual DC plan would be added to the scheme’s assets, as members had the legal right to transfer their pension savings to another provider at retirement.
The Nedlloyd Pensioenfonds is to continue as a closed scheme as of 2020. Frans Dooren, its director, said he couldn’t provide additional details yet, as the employers involved hadn’t yet informed their workers.
Members owed average 15% indexation payments – survey
Dutch pension fund participants and pensioners have missed out on 15% of indexation on average since 2010, a survey has suggested.
According to Nibud, a foundation that researches and advises on family finances, only Dutch retirees with an additional pension of less than €5,000 had not lost purchasing power during the past eight years.
It found that Dutch retirees with highest additional pension had lost the most purchasing power.
Pensioners with occupational and third pillar pensions of €10,000 losy 3.4%, while those with €30,000 had lost 8.3%, Nibud reported.
Nibud, which assessed 10 pensioner households in a static situation, attributed the loss of purchasing power in particular to the lack of inflation compensation by pension funds.
However, it said that the income of households had also been affected by new and means-tested fiscal rules.
The survey – commissioned by 50Plus, the Dutch the political party for the elderly – found that retirees with an additional pension of €5,000 had gained 2.7% in purchasing power.
Pensioners without an occupational pension, and dependent on the state pension (AOW), gained 4.4%.
Dutch pension funds have granted barely any inflation compensation since 2010, with a number having been forced to cut pension payouts during 2013-14.
In 2018, indexation has been 0.2% on average and Nibud said it expected a similar percentage to be granted in 2019.
Of the five largest pension funds, only BpfBouw, the €58bn scheme for the building industry, has given its participants and pensioners inflation compensation this year, paying 0.59%.