New Unilever pension scheme: where do we stand?

The Netherlands is getting a new pension system. A radical change that involves more than € 1,700 billion and for which the government must draw up the rules. In the meantime, Unilever and the trade unions have begun discussions on what this means for the Unilever pension. A brief overview:

• Not all details of the new system are known yet. The Dutch government – with a Pensions Minister for the first time in history – aims to have the legislation finalised by the end of 2022.
• The aim of Unilever and the trade unions (jointly: the social partners) to introduce the new scheme at Unilever as of 1 January 2023 – as agreed in the Collective Labour Agreement – seems no longer possible. The new date is now 1 January 2024.
• The talks will be intensified in the coming months. Once Unilever and the trade unions have reached agreement on a scheme we, as a pension fund, expect that it will take about a year and a half to implement the agreements (change administration, making calculations and communication). During this period, the supervisory authority, De Nederlandsche Bank, must also approve the new scheme.

Significance for Forward and Progress (parts of the Unilever Pension Fund)
The social partners must agree on a new Forward scheme that fits within the new pension system. They can also request the pension fund to transfer the pensions already accrued with Forward to the new scheme. It is then up to the board of the pension fund to assess that request in terms of feasibility and balance.

Since no more pension is accrued at Progress, Progress may (as an exception) remain under the old pension system. However, it must be demonstrated that this is in the interests of the members. Unilever's obligation to make an additional contribution (in the event of an inadequate financial situation) will play an important role in this, as additional contributions will no longer be possible under the new system.

Role of Unilever Pension Fund
Prior to the transition, we must ask our members to what extent they are willing to take investment risk for their pension. Later this year, you will therefore receive an invitation to participate in a survey.

In addition, as a pension fund, we closely follow the discussions between Unilever and the unions. Once the social partners have reached an agreement, our board will be asked to assess and implement the agreements made. If the assessment is positive, we will work out the agreements and implement the scheme.

What is changing and why?
In the new scheme, pension is accrued in a different way than in Forward's current scheme; the contribution will be fixed, but the outcome will not be. The contribution goes into the member's personal pension pot. There is no longer a commitment to a certain amount of the pension, we are only talking about the expected level of the pension. By letting go of commitments, pension funds need to reserve less money (a smaller buffer).

In the new system, pensions will move more in line with the economy. This means that pensions could rise more quickly in the future, but also could be lowered more quickly. Regardless of the arrangement agreed by the social partners, important benefits such as collective investment and the ability to share risks between participants will remain.