On 2 April, ABN AMRO and trade unions FNV Finance, De Unie and CNV Dienstenbond reached a negotiated result for a new collective labour agreement (CLA).
The main points agreed in the new CLA are:
zero growth for salaries throughout the two-year term of the CLA
modification of the pension scheme to comply with statutory frameworks
reduction of the contribution payable by pension fund participants
transition of the pension plan to a Collective Defined Contribution (CDC) Plan
one-year extension of the CLA’s Social Plan until 1 January 2016.
Caroline Princen, member of ABN AMRO’s Managing Board: "I am very pleased that we have reached a negotiated result. Although this has been a long process, all aspects were considered thoroughly. Many of the issues on the table were thorny. With zero growth agreed for salaries and the pension scheme being modified, this CLA reflects austerity, which is in line with the spirit of today’s economic situation and the bank we want to be now and in the future. I am also very happy that, with the trade unions and the pension fund, we have been able to conclude a pension result, which is a very relevant issue for the bank and has been endorsed by the bank’s Employee Council (Central Works Council), the pension fund’s council of participants, and the Association of Retired ABN AMRO Employees."
The new CLA will take effect retroactively on 1 January 2014 and will remain valid until 1 January 2016, subject to its being approved by the trade union members. After ratification of this CLA, its details will be set out in an execution agreement, after which the transition to the CDC pension scheme will be implemented. We will know by 1 May 2014 whether these conditions have been fulfilled and, consequently, whether the CDC pension scheme will then have become a fact. ABN AMRO and ABN AMRO Pensioenfonds have also agreed that the bank’s duty to restore the pension fund’s coverage ratio by way of additional contributions will be terminated. ABN AMRO will pay a one-off lump sum of EUR 500 million to compensate for this. At the same time, any surplus funds in ABN AMRO Pension Fund will no longer flow back to ABN AMRO. The new pension scheme will maximise ABN AMRO’s pension expenses and will remove accounting risks related to pension commitments from the bank’s balance sheet.
As part of the CDC scheme, we will make every effort to implement an average salary system, based on fixed and maximised pension contributions. This will also be subject to tax regulations, entailing a standard retirement age of 67 years and a 2.05% pension accrual rate for 2014, which is to be lowered to 1.875% as from 2015. The contribution payable by pension fund participants will be lowered to 5.5% as from 2015.
ABN AMRO Pension Fund has not fully indexed pensions in recent years and may decide to grant catch-up indexation. To limit the financial impact of this decision for ABN AMRO Pension Fund, parties have agreed that the bank will pay the pension fund a one-off contribution of EUR 200 million.
With regard to the financial impact the negotiated pension result will have for ABN AMRO, ABN AMRO has today issued a separate press release entitled: ABN AMRO reaches negotiated result with main stakeholders on new pension scheme for employees in the Netherlands.