Roissy, June 11, 2021
New pension scheme agreement reached for ground staff KLM, KLM Ground pension fund now also a Defined Contribution Scheme
Following the earlier conversion of KLM pension schemes into collective defined contribution schemes for Cockpit and Cabin staff in 2017, now also an agreement has been reached for the KLM Ground staff fund. This implies that all major KLM pension funds now (finally) have a collective defined contribution scheme. This will lead to more predictable annual contributions and less volatility on the Balance Sheet. A shift fully in line with the general trend in
KLM and the five Dutch ground unions in KLM reached an agreement allowing the modification of the ground’s pension scheme as per
- This agreement will eliminate the risk for deficit payments and thus will avoid significant variances in the equity position.
- The amended pension scheme will qualify as a collective defined contribution scheme under IFRS.
- KLM agreed to a modest increase of the yearly pension premiums as from
January 2021 . - Following changes in Dutch pension regulation since 2014, lower pension premiums were paid by KLM to the KLM Ground pension fund. As agreed with the unions, the savings since 2014 were set aside by KLM and amount to
49 million euros . This amount will now be paid as a one-off contribution to the Ground pension fund inJune 2021 .
According to IAS 19, the de-risking of the Ground pension fund will lead to the derecognition of the so-called “Pension Asset” on Air France KLM’s balance sheet. The pension asset amounted to
With this agreement, KLM has finalized the de-risking of the three main Dutch KLM pension schemes, thus contributing to reduce significantly the volatility of the annual pension contributions and the Group’s balance sheet. In addition, the Group balance sheet will not show a “Pension asset” anymore as from
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Air France-KLM Press release New pension scheme agreement reached for ground staff KLM ENG
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