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. That is why they opted for a so-called “solidarity contibution scheme”. In such a scheme, the total assets of all participants are invested jointly.

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 also 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 next year. Invites will follow by e-mail.