NETHERLANDS - Dutch electronics firm Philips has slammed standard defined contribution (DC) plans for being too complex after revealing plans for a new design.
Jan Snippe, head of corporate pensions at the firm, said the company would roll out a hybrid pension version for non-executive workers in the UK and Germany.
In the UK this would mean replacing the existing DC plan with a more structured version which would be better for the company and its members, said Snippe.
Meanwhile, in Germany, Snippe said the firm opted for a hybrid pension design because it wished to reduce the risks associated with defined benefit (DB) schemes and DC plans.
Snippe said: “Standard DC plans are far too complex and people cannot deal with the complexity. We are trying to make it simpler for participants and come up with solutions.”
He added that the new scheme, which should be unveiled in the coming months, might invest in index-linked instruments or equity funds, but this depended on the pension risk.
The hybrid plan follows the launch of a new pension design, which combined DB and DC for Philips executives in Holland last year.
In total, Philips has pension liabilities amounting to around €20bn.
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