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The annual premium contribution by the Group is determined by PGB, based on the actuarial cost of
purchasing pension rights on an annual basis. The Group has no obligation to cover any plan deficits, nor
are there any specific separate plan assets dedicated to the Group in this pension plan that are managed
by PGB. After payment of the annual premium, the Group has no obligation to pay for additional
contributions or higher future premiums in the event of a shortfall at PGB, nor if the plan or the fund is
terminated. Furthermore, the Group has no entitlement to any surplus in the PGB pension fund. Future cash
flows are limited to the payment of future premiums for purchasing (new) rights for the years to come. The
premium is influenced by the usual, underlying actuarial assumptions, expected returns and agreed
contribution ceiling.
Besides Boskalis, multiple other companies have also arranged their pension plans with PGB. The Group
has no direct involvement in the governance of PGB. PGB does not hold specific, segregated pension assets
dedicated to the Group. The share of the Boskalis pension plans in total liabilities and assets at PGB is
limited. The plan assets of the Boskalis pension plans at PGB are actuarially calculated based on the
present value of liabilities administered by PGB.
Dutch multi-employer pension funds
Some of the Dutch staff, including personnel transferred to the Group following the acquisition of VBMS, VSI
and Stemat, participate in one of five industry-wide multi-employer pension funds, all within the framework
of the Dutch Pension Act as referred to above, of which Bedrijfstak Pensioenfonds Waterbouw is the only
one with a proportionately significant premium contribution by Boskalis of 20% (2015: 21%). As at
31 December 2016 the Bedrijfstak Pensioenfonds Waterbouw had a coverage ratio greater than 105%
(2015: greater than 105%).
The Group has no direct involvement in the governance of the multi-employer pension funds. Employers’
Associations, of which the Group is a member, designate some of the board members and / or supervisors
of the multi-employer pension funds. In addition, the boards also include representatives of employees and
retirees, possibly supplemented by one or more independent persons. The pension includes retirement and
survivor's pension. These pension funds have indicated they are not able to provide sufficient information
for a calculation in accordance with IFRS because there is no reliable and consistent basis to which to
attribute the pension obligations, plan assets, and the absolute and relative share of the Group in the fund
and to which to allocate income and expenses to the individual member companies of these pension funds.
As a result, these defined benefit plans are recognized in these financial statements as a defined
contribution plan in accordance with IFRS. In all cases relating to industry-wide multi-employer pension
funds, the Group has no obligation whatsoever to pay additional contributions in the case of a deficit in the
respective fund, other than paying the annual premium. Nor does the Group have a right to any surpluses
in the funds. The premium covers the actuarially determined cost of purchasing the yearly rights for
participants. The premium on the basis of the actuarial cost of purchasing rights in years is influenced by
customary underlying actuarial assumptions, expected returns and often agreed ceilings. The expected
contribution for the coming year is explained below.
Other pension plans
Other pension plans relate to, individually not material, multi-employer pension plans arranged with
pension funds in the United Kingdom and insurance companies in the Netherlands, Belgium, the United
Kingdom, the United States and until 1 December 2016 in South Africa (plan transferred together with the
sale of SMIT Amandla Marine), as well as to minor unfunded defined benefit plans for two Group
companies in Germany. These pension plans are in compliance with local laws and/or regulations
applicable in the aforementioned countries. With the exception of the plan in the United Kingdom, where
the Group may appoint one or more Directors or Trustees, the Group has no direct and/or significant
involvement in the governance of these pension plans. The pension plans are characterized by defined
benefit rights over the participant’s years of service, which are mainly based on average wages and
include retirement and survivor’s pension. These pensions are indexed, for the main part with a limit being
set to the available contributions and the return on plan assets, respectively. The pension liabilities and
pension assets are placed with and managed by the pension funds or insurance companies. The risk for the
Group relating to these pensions is therefore limited. With the exception of a closed pension plan in the
United Kingdom, the future cash flows for the other arrangements are limited to the actuarially calculated
annual premiums based on the cost of purchasing future pension rights. In other funded defined benefit
plans there is no enforceable statutory or regulatory direct obligation to cover any deficits to fulfil future
actuarial obligations. The contributions are subject to the customary, actuarial assumptions, expected
returns and agreed contribution ceiling.
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ANNUAL REPORT 2016 – BOSKALIS