Van Lanschot and its Works Council have reached agreement on a new pension scheme, which will be a mix of collective and individual defined contributions from 1 January 2015. Van Lanschot will be under no obligation to make any extra payments, nor will it be entitled to any pension fund surpluses.
The change will help Van Lanschot limit the risks and volatility of its pensions bill, and it has made a one-off payment of € 50 million into the Van Lanschot pension fund to make up for the risks so transferred.
In 2014, the pension scheme adjustment should have a net positive effect of over € 50 million on Van Lanschot’s net profits, due to the release of the net pension liability and the recognition of the one-off payment.
The effects of the new scheme on the phase-in Common Equity Tier I ratio will be negative.
On 30 September 2014, this ratio (not including retained earnings in the current financial year) stood at 14.1%. The phase-in Common Equity Tier I ratio is expected to fall by around 1 percentage point to reflect the change in the pension scheme, or around 0.4 percentage points including retained earnings. The new arrangements will have only a limited effect on the fully loaded Common Equity Tier I ratio.
Van Lanschot’s annual results for 2014, which are scheduled for release on 10 March 2015, will incorporate the effect of the change to the pension scheme.