The beneficiaries of the Nestlé pension plan pay a fixed contribution of 2% of their respective salaries into the Nestlé Pensionskasse (NPK). In return they receive the benefit of participation in the Nestlé Versorgungkasse’s (NVK) defined benefit (DB) plan. The Nestlé Rückdeckungskasse (NRK) is a support fund, which serves the purpose of securing means for pension payments to the beneficiaries of the NVK.
Under the terms of the DB plan, NPK promises to pay its beneficiaries a pension worth 15% of their final salary. The pensions are financed using the individual members’ contributions, which include excess shares as well as contributions made by Nestlé through the NVK scheme. The NVK is structured as a congruent reinsurance support fund.
There are three types of pension available under this scheme: retirement pension; surviving dependants’ pension; and a disability pension.
As the capital paid into the NPK comes from taxed salaries, the contributions are also eligible for tax exemption, under the rules of the scheme.
In 2002 Nestlé decided to create an opportunity for its members to benefit from ‘remuneration conversion’ (known as Entgeltumwandlung). Under this scheme, its members can pay up to 4% of the contribution assessment limit of the pension insurance into the NPK, free of tax and national insurance. Furthermore, Nestlé has established a ‘pension calculator’ on the company intranet. The online tool offers members the opportunity to electronically calculate their own personal pension plan. The service has proved very popular and is widely used by the scheme members.
Administration costs have been included in all tariffs. What this does is make it possible for members to retain their membership even in the case of sell-offs of companies or spin-offs of parts of firms. The paid contributions can be transferred from or to other funds.
All of these pension plans are controlled on a central management system, using SAP software. The NPK’s team of 18 employees administer a portfolio of 16,000 active members and 8,000 passive members. Of the active members, 7,000 of these are members of the Schöller Group, added in 2002.
The total assets in the pension fund now amount to around e900m. All of these assets are deposited with a global custodian bank. Nestlé is able to access the exact value of its pension assets at any time, thanks to a direct internet link which has been set up to connect the fund with its custodian. The capital investments of both the NPK and NRK schemes are largely carried out by the funds’ portfolio of external investment managers in special funds.
Nestlé’s pension plans are designed on a non-discrimination basis, and are therefore participated in by employees of all salary levels. Through this transparent ‘one-class’ system, Nestlé believes its fund has nurtured a deep trust from its employees as well as gained widespread support.
Another reason for the members’ satisfaction with the schemes is due to the fact that they are tax optimised with relatively low administration costs. These benefits are then passed on completely to the fund’s beneficiaries.
Nestlé believes, that through its chosen fund structure, it is able to offer all employees an optimally designed pension plan to meet their needs. Not only that, but it can also provide them with coverage for their relatives.

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