KLM Royal Dutch Airlines, Amstelveen, Netherlands, agreed with five Dutch unions to move its ground crew workers into a collective defined contribution plan.
As part of the agreement, KLM will pay a €49 million ($59 million) one-off contribution this month to the pension fund for ground workers, a June 11 news release said.
The agreement, which will see employees move from a defined benefit fund, was aimed at eliminating the risk of deficit payments and significant differences between assets and liabilities, the release said. The "pension asset," as the fund is recognized in the company's balance sheet, equaled €551 million as of March 31.
The move follows a similar decision by KLM in 2017 when the airline decided to enroll its pilots and flight attendants into collective defined contribution arrangements. In 2018, KLM's cockpit staff was transferred to a CDC plan from a defined benefit arrangement, while KLM contributed a one-time lump sum of €194 million.
KLM said the latest move finalized the derisking of its main Dutch KLM pension funds, reducing the volatility of the annual pension contributions and the group's balance sheet.
A spokesman did not provide details of the pension fund's assets and contribution rate that will be paid by employees and employers under the new arrangement.