Philips and the unions (the ‘social partners’, i.e. management and labour) have agreed on the form of the pension plan under the Dutch Future of Pensions Act (Wet toekomst pensioenen). The key point on which they have agreed is that we will switch to a solidarity defined contribution plan in 2026. Philips Pensioenfonds will implement this plan for all pension beneficiaries, active members and policyholders of the Pension Fund. This article explains the most important features of the pension plan that has been chosen, and how Philips Pensioenfonds will now proceed. Lastly, it provides some information about the right of pension beneficiaries to be heard.
What are the most important features of the solidarity defined contribution plan?
As I already explained in Gener@ties, the solidarity defined contribution plan is a form of pension plan designed by the legislature to make pensions more personal, while still retaining elements of solidarity. So what does that mean? The most important features of a solidarity defined contribution plan are as follows:
- Although each member has their own personal pension savings, they do not make their own investment decisions.
- For policyholders and members actively accruing their pension, the investment policy is linked to their age. This means taking more risk for younger members, who have a longer period to accrue their pension. The closer a member is to their retirement age, the less risk we will take. For pension beneficiaries, a uniform investment policy is used.
- The pension savings are all invested collectively, as they are with the existing pension plan.
- Besides the personal pension savings, we will also have a collective ‘reserve’ that we can draw on to avoid lowering the pensions of pension beneficiaries. This reserve is called the ‘solidarity reserve’.
How do we proceed now?
The decision to adopt a solidarity defined contribution plan is an important milestone. However, the social partners still face plenty more choices about the new pension plan and how we will make the switch. Philips Pensioenfonds provides the social partners with as much support as possible, by running calculations and offering advice. At the same time, the Board of Trustees also has to make decisions of its own about the new pension plan and how we make the switch, in particular where it concerns making sure that the pension plan is practicable and finding the proper balance in the switch overall. As required by law, Philips Pensioenfonds records the Board’s resolutions in an implementation plan. This includes a communication plan, with details about when and how we share further information with you.
How are our pension beneficiaries heard?
The social partners’ decisions about the future pension plan also affect our pension beneficiaries. We have noticed that our pension beneficiaries are not always aware of that, based on the idea that they do not have a direct link to the employers anymore. Even so, by law it is the social partners who decide what type of pension plan the pension fund will administer. This extends to decisions about entitlement conversion (invaren), meaning that the new pension plan will also apply to pensions that have already been accrued. Entitlement conversion is only possible if the employer makes a request to the pension fund.
Right to be heard
By law, the pension beneficiaries must have a say in the social partners’ decision-making process. This is given shape in the ‘right to be heard’. The social partners’ decisions, the considerations underlying those decisions and the impact of those decisions are set out in a transition plan. The associations of pension beneficiaries and/or non-contributory policyholders have a right to be heard about that transition plan, i.e. they have the opportunity to explain their views on the plan. The social partners then have an obligation to provide feedback on what they did with those views. Philips Pensioenfonds does not play any formal role in this process.
However, it is important to note that the pension fund assures that all our members have a voice, through the representatives of the active members and pension beneficiaries on the Board of Trustees and the Accountability Body. We also regularly survey our members’ opinions on various different topics. Lastly, you may of course always share your questions or opinions with the Board of Trustees without waiting for a survey, by sending an email to algemeenbestuur.ppf@philips.com
To find out when to expect further information, take a look at our timeline, which shows when to expect what information.
Jasper Kemme
Managing Director