New Pension Plans for Den Hartogh Logistics

“We believe that collaborating with employees leads to the best outcomes,” says HR Director Annelies Balistreri. So, when the organization began thinking about a new pension arrangement, the works council (OR) was involved right away. “You can send out surveys to find out what employees want, but this topic is too complex for that. You need to go in-depth.” A pension committee of five OR members was formed, with its own advisor. They received in-depth training, as did the full OR, which would eventually need to approve the plan.

Den Hartogh Logistics had multiple pension schemes in place, partly due to a merger. Two years ago, the organization decided to address this. The timing was ideal: three schemes were set to expire at the end of 2020, explains Compensation & Benefits Manager Marc Starink. One universal plan for all employees wasn’t feasible, partly because some employees were required to participate in an industry pension fund. “But reducing the number of contracts and providers already increases efficiency.”

Keeping the current plans unchanged would have been very expensive and unsustainable with the upcoming pension system changes. “Costs would have skyrocketed without providing extra benefits for employees,” says Starink. Most employees were under a guaranteed average salary (middelloon) plan. A defined contribution plan better aligns with the new system. So Den Hartogh wanted to offer this option to those whose contracts were expiring and who were not obligated to participate in a sector-wide fund.

Initially, the idea was to let current employees choose between the average salary plan and the defined contribution plan. “We thought switching everything at once would be too drastic. But experts convinced us, and the pension committee, that a two-track system would be unwise. They gave us the confidence that a defined contribution plan can be just as good and more future-proof.” The decision was made to move forward solely with the defined contribution plan, and the OR agreed. Starink was pleased that the OR actively supported a modern solution: “They considered both employee and organizational interests. That was very helpful, we won’t need to revisit this in a few years because the scheme isn’t future-proof.”

The OR’s input proved valuable in other ways too. The new plan allows employees to lower their contribution from the mandatory 9.6% to 4% of the pension base, meaning more take-home pay. New hires automatically contribute 4%; current employees can choose. The employer team - Balistreri, Starink, and CFO Bram Paape - initially wanted 9.6% to be the default, so employees would have to actively opt into the lower contribution. “That was based on our duty of care. But we weren’t sure if employees would prefer the lower rate as the default instead.” They consulted the pension committee, which also preferred 9.6% as the default.

To Starink’s surprise, few people opted for the lower contribution. “Even though that gives around 5% more net pay, which seems pretty appealing.” Was it mainly younger employees who chose the lower contribution? “No clear link to age, we saw older employees close to retirement also choosing it.”

Once an agreement was reached, the next step was selecting a pension provider, which involved a "beauty parade" of three providers. By late summer 2020, a year had passed. Highberg was brought in to analyze the proposals, and the employee representation group was also involved, as they had to formally approve the plan.

The COVID-19 pandemic complicated matters. “That was tough,” says Balistreri. “Most of the coordination with the pension committee and OR had to be done online. A few times, we rented a large hall to discuss and negotiate details. Especially at the end, you want to meet face-to-face.” In-person or group sessions with employees weren’t feasible, but the online meetings worked well.

Including the OR from the start paid off. While Balistreri valued their content and representation most, their formal approval gave employees added confidence. “That builds trust. That’s our culture—our employees trust that the company has their best interest at heart.”

Special attention was given to the individual consent letters for employees, detailing the specific impacts and annual compensation. “For many people, pensions are a distant concern. I knew we did well when I got an email from a critical employee who had complained about the delay. After receiving the personalized pension letter, he wrote: Now I understand why it took so long, thank you. That was great.”

Both Balistreri and Starink emphasized the importance of the personal connection with Highberg. “Content-wise, Highberg met all expectations, with a clear overview of the case, and knowledge of legal and tax developments. Their consultants handled all stakeholders well. You work together for a long time, you need a personal connection and a bit of fun. After all, ‘fun in business’ is our motto,” says Starink.

“A consultancy firm should match your company culture,” adds Balistreri. “We want people who are pragmatic and professional, and who don’t overcomplicate things. No-nonsense, but well-executed. That match with Highberg really mattered to us.”

And the contact with the Works Council? In that, openness and trust were paramount, says the HR director. 'Trust is extremely important during such a process. For example, we shared all the documents with the pension committee. It was a real collaboration. We were keen on the content and of course we didn't get everything we wanted. But we never parted on a note of discord. We wanted to accommodate employees as much as possible, but there was a maximum to our budget and to the transition period to the new scheme.'

The pension is embedded in the total benefits package, Balistreri emphasizes. Den Hartogh itself therefore also benefits from a good arrangement for employees. 'We want to be an attractive employer, also in the long term. In our sector and with our growth ambitions, that is in our own interest.'