25. Employee benefits

The Group operates defined contribution plans in the Netherlands, United Kingdom, Belgium, Germany and Ireland under broadly similar regulatory frameworks. All pension plans that are accounted as defined benefit arrangement are closed for new entrants. Defined benefit plans in the United Kingdom and Ireland are in a net asset position; there is no asset ceiling on these plans as the Group is entitled to a return of surplus at the end of the plans’ lives. A further description of the post-employment benefit plans per country is as follows:

Netherlands

In the Netherlands, the Group makes contributions to defined benefit schemes as well as defined contribution schemes. The pension schemes in the Netherlands are subject to the regulations as stipulated in the Pension Act. Due to the Pension Act the pension plans need to be fully funded and need to be operated outside the Company through a separate legal entity. Several multi- employer funds and insurers operate the various pension plans. The Group has no additional responsibilities for the governance of these schemes. The Group has made agreements with a specific group of pensioners regarding a possible supplementary indexation, the granting of which is entirely at the discretion of the Group and will only be considered if, at a minimum, the associated conditions are met. 

The basic pension for every employee is covered by multi-employer funds in which also other companies participate based on legal requirements. These funds have an indexed average salary scheme and are therefore defined benefit schemes. Specifically, these are the industry pension funds for construction, metal & technology and railways. As these funds are not equipped to provide the required information on the Group’s proportionate share of pension liabilities and plan assets, the defined benefit plans are accounted for as defined contribution plans. The Group is obliged to pay the predetermined premium for these plans. The Group may not reclaim any excess payment and is not obliged to make up any deficit, except by way of the adjustment of future premiums. The build-up of future pension entitlements for employees is covered by the multi-employer funds or external insurance companies. Defined benefit schemes are closed for future accumulation and indexation is mainly linked to the industry pension fund for construction. Pensions for salaries exceeding the basic pension amount (top-up part) are not covered by multi-employer funds and are carried out under separate contracts and qualify as defined contribution schemes. The Group has established an accountability committee, with representation from the Central Works Council (CWC) and the Socio-Economic Committee of the BAM pensioners association (SEC).

At year-end 2025, the (twelve-month average) coverage rate of the industry pension fund for construction is 133% (2024: 126%). The industry pension fund for metal and technical sectors has a (twelve-month average) coverage rate of 115% at year-end 2025 (2024: 113%). The (twelve-month average) coverage rate of the industry pension fund for railways is 136% (2024: 132%).

United Kingdom

In the United Kingdom, the Group makes contributions to defined benefit plans as well as defined contribution plans. The Group is responsible for making supplementary contributions to recover the historical financing deficits. The plan for supplementary contributions was last revised after the most recent actuarial valuations of the funds in April 2023 and led to supplementary contributions of €2 million in 2025 (2024: €6 million). The Group replaced the closed defined benefit pension schemes with defined contribution schemes, which are executed by an independent insurance company. Following the closure of future accumulation in defined benefit pension schemes in 2010, employees who participated in these schemes were invited to participate in the defined contribution schemes.

During 2023, the High Court in the United Kingdom concluded in a case between Virgin Media and NTL Pension Trustees II that a salary-related contracted-out scheme cannot be changed unless the actuary confirmed in writing (through a so-called section 37 confirmation) that the scheme would continue to satisfy the legal norms. If such confirmation would not exist, the High Court concluded that the change would automatically void. In 2024, an appeal of the case in the Court of Appeal was dismissed and the ruling upheld. The case has the potential to cause significant issues in the United Kingdom pensions industry. An initial assessment of the historic scheme amendments has identified that the majority of amendments do not require further action at this stage. For some amendments, further investigation is required to identify as to whether the appropriate written actuarial confirmation was in place at the date of the amendment. Until the exercise is completed, it is impossible to estimate the potential impact, if any, on the Group’s schemes.

In addition, several defined benefit schemes are accounted for as defined contribution schemes as the external parties administering the funds are not able to provide the required information. These schemes have a limited number of members. The Group is obliged to pay the predetermined premium for these plans. The Group may not reclaim any excess payment and is not obliged to make up any deficit, except by way of the adjustment of future premiums. The Group did not make material contributions in 2025 and 2024.

Ireland

In Ireland, the Group has a defined benefit scheme and a multi-employer pension scheme, which was fully converted from a defined benefit scheme to a defined contribution scheme with effect from 1 January 2006 for new entrants. The Group is responsible for making supplementary contributions to recover the historical financing deficits. The plan for supplementary contributions was last revised after the most recent actuarial valuations of the funds in 2017 and led to supplementary contributions of €4 million in 2025 (2024: €4 million).

Other

Includes pension plans in Belgium and Germany. In Belgium, the Group makes contributions to a relatively small defined benefit scheme that is executed by an external insurance company. The Group has also made arrangements for employees to participate in a defined contribution scheme. The defined contribution plans are subject to the law of 28 April 2003 on occupational pensions and due to changes in the law in December 2015 defined contribution plans are classified and accounted for as defined benefit plans.

In Germany, the Group operates one remaining small defined benefit pension scheme financed by the employer, which is closed to new participants.

The significant actuarial assumptions per country were as follows:

Assumptions regarding future mortality are based on actuarial advice in accordance with published statistics and experience in each country.

Movements in the defined benefit pension plans over the year are as follows:

The average duration of the defined benefit obligations per country were as follows:

Plan assets are comprised as follows:

Plan assets do not include the Company’s ordinary shares. Assets with a value of €252 million are unquoted (2024: €360 million).

The impact to the defined benefit obligation to changes in weighted principal assumptions is as follows:

If the life expectancy increases or decreases by one year, the pension liability will increase or decrease by approximately €29 million (2024: increase or decrease by €34 million). The sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur as changes in assumptions are correlated. The sensitivity analyses are based on the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) as when calculating the pension liability recognised within the statement of financial position.

Through its defined benefit pension plans the Group is exposed to a number of risks, the most significant of which are detailed below:

For funded plans, the Group ensures that the investment positions are managed within an asset-liability matching (‘ALM’) framework that has been developed to achieve long-term investments that are in line with the obligations under the pension schemes. The Group’s ALM objective is to match assets to the pension obligations by investing in long-term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency. The Group monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the pension obligations. The Group has not changed the processes used to manage its risks from previous periods. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets.

Employer contributions to post-employment benefit plans for 2026 are expected to decrease from €13 million in 2025 to €6 million. The contributions in 2024 and 2025 include extra amounts for indexation.