Rabobank and trade unions CNV and De Unie have agreed to switch to a defined contribution (DC) arrangement as of next year, which means Rabobank’s €32bn collective defined contribution (CDC) scheme will soon be closed for new accruals.
The agreement is part of the new collective labour agreement between Rabobank and the trade unions. The agreement is not yet final as Rabobank is still in discussions with trade union FNV Finance. It is reported that these talks involve the planned switch to individual DC which FNV is traditionally hesitant to support.
It’s not yet clear whether the transition to a DC arrangement means Rabobank will opt for the so-called flexible arrangement with personal pension pots in the new pension system.
It also remains unclear whether Rabobank will start a new pension fund, as its competitor ING for example did several years ago, or outsource new accruals to an external provider.
Social partners said they will wait for the results of a referendum among trade union members before commenting on the matter.
It’s likely that social partners are opting for a temporary DC solution in the run-up to the pension transition that will take place between 2023 and 2027. This was one of two options under consideration at the most recent meeting by the Rabobank scheme’s accountability body, with the other one being a continuation of the scheme’s current CDC arrangement.
It is notable that Rabobank is choosing to already switch to a DC arrangement now instead of extending the current CDC arrangement for a few years until the pension transition. It is likely due to the combination of high costs and low accruals under the current arrangement because of the low interest rate environment.
The accrued pensions until 2022 will remain in the existing pension scheme for the time being, trade union De Unie said on its website.
It’s not yet clear whether these accruals will be transitioned to the new pension system. Social partners are reportedly also considering to grandfather existing rights through a buy-out.
Rabobank is one of the largest company pension schemes in the Netherlands, with €32bn in assets under management, 26,000 active members and 21,000 pensioners. At the end of March 2022, it had a funding ratio of 125%.