Unchanged: share risks and returns

You share risks (e.g., investment, longevity) and returns on investments with your (former) colleagues.

Unilever and the trade unions believe that solidarity is a key principle for a sound pension scheme, but also wished to offer a certain degree of individual choice. Therefore, they opted for a solidary contribution scheme with a flexible element (i.e. the option to accrue less pension for employees earning above €80,000).

What does a solidary contribution scheme entail?

A fixed contribution is made for the pension. This contribution is allocated to an individual pension capital, but is invested collectively on behalf of all participants.

According to predefined rules, the investment returns are allocated to age groups, and then to individual pension accounts. In the case of negative returns, reductions may also occur.

Under the new scheme, pension amounts are not guaranteed. Their value will depend more heavily on investment performance, with interest rates also playing a significant role.

Once the pension starts, investment returns are spread out as a pension increase (or decrease): the return for one year will always be distributed over the following three years. This helps to ensure greater stability.

In financially challenging times, a collective buffer—the solidarity reserve— may be used. This reserve contributes to the stability of pensions in payment and reduces risks for retirees.
Would you like to know more about this? Then visit one of our webinars and/or walk-in sessions next year.