NETHERLANDS – Dutch industrial giant Philips’ pension costs are to more than double this year to over €1bn – including €584m in the UK in response to “regulatory changes”.
“The company expects considerable cash outflows in relation to employee benefits which are estimated to amount to €1.086bn in 2006 (2005: €445m),” the Eindhoven-based company said in its 2005 annual report released today.
The bulk would consist of €931m in employer contributions to defined benefit pension plans - €208m in the Netherlands and €723m elsewhere. Among this was a contribution of around £400m in the UK “in response to recent regulatory changes”.
And it said that €76m and €79m would respectively go as contributions to defined contribution plans and unfunded plans.
The Dutch plan – outsourced to Merrill Lynch Investment Managers - is €1.5bn funded while the others are €1.8bn underfunded.
The company unveiled an actual return on Dutch plan assets of €1.7bn in 2005, with other funds returned €794m. Dutch pension assets have grown to €14.5bn, with its other schemes amounting to €6.3bn – taking the total to €20.8bn.
Last week former Philips pension fund chief executive Dick Snijders said there was too little professionalism in the Dutch pension industry.
Meanwhile, MLIM has named Catheleyne van Erp as sales executive and vice president in Benelux. She joins from Deutsche Asset Management.