NETHERLANDS - Akzo Nobel Nederland and Akzo Nobel's pension fund have received a summons from the Association of Akzo Nobel retirees (Vereniging van Gepensioneerden Akzo Nobel) regarding the revised financing of the company's Dutch pension scheme.
Piet Provó Kluit, chairman of the association, said there were two issues at stake in the pending court case which directly affected benefits paid by the healthcare products, coatings and chemicals company to its retirees.
The first issue arose when Akzo Nobel changed its pension scheme from defined benefit to defined contribution following discussions with its union.
According to Kluit, Akzo Nobel then wrote to its retirees in July 2005 explaining that, following an agreement with the unions, the nominal value of retiree pension payments may have to be reduced if the future financial position of the company required it.
While Akzo Nobel has said the changes to its pension scheme have “substantially improved the financial position of the pension fund”, the association has argued the changes should not be applied to retirees.
“We say that as people retired before July 2005, we have nothing to do with your agreements. Our lawyer says you can not affect people who are already retired and certainly not change your obligation to pay nominal pensions. You can not say this will all depend on the financial situation of the pension fund.”
The second point, said Kluit, was a matter of principle related to the non-payment of indexation [annual correction for inflation] in July 04. According to the association, the company is obliged to make a non-conditional correction up to a maximum of 4%, to all people who retired before June 2005. It accepts that anything above that is conditional.
According to Kluit, the discussion was kickstarted when Akzo Akzo Nobel did not make the correction 1 January 2004, even though subsequent corrections were made in 2005 and 2006. The association has demanded payment of this missing 2004 correction, which it valued at 1.7%, as part of the same court case.
Akzo Nobel said it had “full confidence in a positive outcome of the proceedings”, and that the new arrangements were fair and, “served the continuity of the company in the interests of all employees, both active and retired.”
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