In “newer” pension plans (i.e. established after 1 January 2015), blue-collar and white-collar workers can no longer be treated differently. By 2025, you will also be required to eliminate existing discriminatory differences in older pension plans. This harmonisation process can
easily take years to achieve.
The next step is for the sectors to get the ball rolling. It’s up to them to ensure that
no additional discriminatory differences are introduced and that existing differences are minimised or eliminated. Negotiations are currently in process and should be completed by 1 January 2023 at the latest, with the outcome to be drawn up in formal Collective Bargaining Agreements. Afterwards, as an employer, you will have two years to complete the harmonisation process in your organisation. And this is a particularly
Waiting for the sector social partners to hash out their harmonisation plans before you get started with your mandatory harmonisation? If so, then you could very well run out of time. This is because the
negotiation of employment terms is particularly slow and meticulous. It’s better if you start early than later with your harmonisation plan.
There is no such thing as a standard harmonisation plan –
you have to define the terms yourself. It is a custom job where you, together with your legal advisors and actuaries, establish the framework for negotiating with the social partners. Of course, you first have to identify your existing differences in treatment between blue-collar and white-collar workers.
You also have the option to apply a
phased harmonisation scheme. For example, if contributions towards your pension plan for blue-collar workers are lower than for white-collar workers, you can decide to gradually raise the annual contribution amount so that they are at the same level by 2025.
In the meantime, before you delve into the task of minimising or eliminating discriminatory differences between blue-collar and white-collar workers in your existing pension plans, you need to make sure that:
you do not expand on existing differences between blue-collar and white-collar workers,
you do not introduce any new differences
In other words, even if you haven’t started the harmonisation process yet, make sure you don’t do anything that would make the exercise (even more) difficult.
If your company doesn’t use the terms “blue-collar” and “white-collar” and applies
another function classification system to categorise its staff members on the basis of objective criteria, then you can keep using these classifications in your pension plan (Art. 14 of the LSP). Just make sure that you do not indirectly maintain or introduce discriminatory differences between blue-collar and white-collar workers. You may also use an objective function classification system such as the Hay method.
Want to find out more about this situation or get started with eliminating differences between blue-collar and white-collar workers in your pension plans? You’re always welcome to call or e-mail your regular contact person at AG Employee Benefits.