ING To Transfer Future Obligations Under Dutch DB Plan To ING Pension Fund

(RTTNews) - ING Group (ING) announced it has reached an agreement in principle with the trade unions, the ING Pension Fund, the Central Works Council and the Association of Retired ING Employees to transfer all future funding and indexation obligations under ING's current closed Defined Benefit Pension Plan in the Netherlands to the ING Pension Fund.

The ING Pension Fund manages approximately 18 billion euros of assets for approximately 70,000 current and former employees of ING Bank and ING Insurance. ING Bank and ING Insurance will be released from all financial obligations arising out of the Dutch DB Plan. The Dutch DB Plan will be removed from ING Group's balance sheet.

The key elements of the agreement in principle are: responsibility for future indexation and funding thereof will be transferred to the ING Pension Fund; ING's obligation to restore the coverage ratio of the ING Pension Fund will cease; the cross guarantees between ING Bank and ING Insurance to jointly and severally fund the obligations of the ING Pension Fund will be terminated; ING will pay 549 million euros on a pre-tax basis to the ING Pension Fund for the removal of the obligations with an expected after-tax P&L impact 412 million euros in in the first quarter of 2014; ING will reduce the employees' own contribution to the pension premium under the new DC Plan by approximately 80 million euros over a 6 year period.

For ING Group, the removal of the financial obligations and the cross guarantee between ING Bank and ING Insurance is an important step towards the base case IPO of ING Insurance. The Group said the removal of the Pension Asset on ING's balance sheet of 0.8 billion euros after tax and the payment to the ING Pension Fund of approximately 0.5 billion euros (0.4 billion euros after-tax) for the removal of the pension obligations will result in an after-tax P&L charge of approximately 1.2 billion euros to be booked as a special item in the first quarter of 2014.