Works council scuttles move to Belgium for Bristol-Myers scheme

first_imgThe €63m Dutch pension fund of US pharmaceutical company Bristol-Myers Squibb is to be liquidated and join insurer Aegon rather than follow the company’s initial plan to merge the scheme with its pension fund in Belgium. The Dutch scheme’s works council (OR) had opposed the plan, citing Belgium’s lower solvency requirements.The scheme’s board, in a letter to participants, said the pension rights in its final salary plan would now be transferred to and guaranteed by the insurer.It added that, as part of the transfer, Aegon would increase pension rights by approximately 1% in a one-off transaction. The pension fund also said its additional defined contribution plan, provided by Robeco, would be transferred to Aegon, and that the insurer would take over pensions accrual for its 80 active participants.The scheme announced its intention to liquidate in 2011, as it sought to merge with the sponsor’s Belgian pension fund. It also considered joining PGB, the €19bn pension fund for the Dutch printing industry. In the Netherlands, the merger of multinational companies’ Dutch pension funds with schemes in Belgium – often initiated by their sponsors – has become a hot topic. Aon Netherlands, for example, is awaiting the outcome of a legal dispute over its work council’s right to block a cross-border merger of its Dutch pension fund.The council raised concerns over participants’ right of say, as well as the quality of Belgian governance.Aon Netherlands has threatened to ignore future funding gaps if the works council fails to approve the relocation.Nestlé, meanwhile, ruled out relocating its €564m pension fund Alliance after the scheme’s works council, citing the quality of governance and fund structure in Belgium, rejected the move.The Dutch pension funds of Johnson & Johnson and Euroclear are among the schemes that have recently relocated to Belgium. Several other multinational companies, including BP, DuPont de Nemours and General Electric, are still weighing options on similar moves.last_img

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