NETHERLANDS - The €200m pension fund of maritime service provider Smit Internationale will no longer need to cut benefits by more than 13% after its participants accepted a €30m additional contribution offered by Boskalis, the company's new owner.

By accepting the offer, the participants have also agreed to abandon their legal action into alleged mismanagement by the Smit scheme's board, according to Arno Moonen, chairman of the participants council.

Peter Berdowski, chief executive at Boskalis, had earlier stressed that his company's offer to plug the financial gap would require the abandonment of the legal action.

Moonen - who acknowledged that participants had also accepted the fact that the sponsoring company would not have to make additional contributions in future - said: "Certainty was the most important consideration to us for terminating the legal procedure."

An important reason for the legal action was to determine whether the scheme's board had removed an obligation by the company to an additional contribution in the event of a shortfall.

Both the scheme's participants council and its accountability body had suggested the board prioritised the company's interests over their pensions.

Now, with the additional contribution of €30m, the pension fund can raise its coverage ratio to 97%. At the end of July, the scheme's funding was 86.6%.

According to Moonen, the fund's recovery will now depend on its return on investments, as the contribution is already 27%.

He said the Smit scheme currently had a conservative investment policy, with approximately 25% of its assets in equity and the remainder largely in fixed income.
 

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