6.23 Provision for employee benefits

Movement in the liability for defined-benefit plans and long-service payments

The total liability arising from defined benefit-pension plans and long-service payments is recognised in the statement of financial position as follows:

Liability for defined-benefit plans in the Netherlands

Insured plans

The Group has various insured plans that are placed with an insurer through guarantee contracts. Under these plans, no further pension accrual takes place and the Group is only responsible for costs payable as a result of any indexation of accrued pension entitlements. As a result, the majority of the risks lie with the insurers, who are also responsible for maintaining sufficient assets to be able to make all benefit payments. Supervision is carried out by De Nederlandsche Bank (DNB). The indexation premium is determined on the basis of the accounting policy as set out in the insurance contract. The average remaining term of the pension obligations is approximately 10 years (2024: 11 years).

Industry-wide pension funds

The majority of employees accrue pension with industry-wide pension funds. the main ones being the pension fund for the construction industry (Bpf Bouw) and the pension fund for the engineering, mechanical and electrical contracting sector (Metaal en Techniek or PMT). Both pension funds operated indexed average-salary plans during the 2025 financial year:

• The policy funding ratio of Bpf Bouw is 133.1% at year-end 2025 (year-end 2024: 126.3%). The Group’s share of the total number of participants in this fund is approximately 2% (2024: 2%).

• The policy funding ratio of PMT is 115.3% at year-end 2025 (year-end 2024: 108.5%). The Group’s share of the total number of participants in this fund is approximately 0.4% (2024: 0.5%).

The policy funding ratios are calculated on the basis of the accounting policies applied by the industry-wide pension funds, in accordance with the requirements applicable to them, such as the Pensions Act and the Financial Assessment Framework. For these plans, the Group is obliged to pay the predetermined contributions. The Group cannot be required to make up any deficit, other than through future contribution adjustments. Nor can the Group claim any surplus in the funds. As contribution adjustments are influenced only to a limited extent by the funding ratio, these plans are classified as defined benefit pension plans. In the Group’s financial statements, however, these plans are accounted for as defined contribution plans, as the administrations of the industry-wide pension funds are not set up to provide the full required information.

Long-service payments

The long-service payments are a month’s salary, or a portion thereof, for employment periods of 25, 40 and 50 years.

Expense items recognised in connection with defined-benefit plans and long-service payments

The principal actuarial assumptions as at year-end were:

The discount rate is based on yields on high-quality corporate bonds (based on the term of the benefit obligation).

As at 1 January 2026, the industry-wide pension funds Bpf Bouw and PMT moved to a new scheme based on the pension rules of the Future Pensions Act. All pension entitlements built up under the previous scheme have been transferred into the new scheme ('ingevaren'). The new pension schemes qualify as defined contribution plans, with the pension risks borne entirely by the participant collective. As an affiliated employer, the Group has an obligation only to pay a fixed contribution. For the majority of the insured schemes, up to and including 2025, indexation was linked to that of Bpf Bouw. This indexation link will lapse under the new system because the (current) indexation provision no longer exists in Bpf Bouw’s new pension scheme. New agreements will therefore have to be made for the insured schemes on an adjusted indexation measure. As such agreements have not yet been set, the pension obligation at the reporting date has been measured on the basis of a best-estimate assumption of future indexation (based on the scheme as it applied until 1 January 2026).

Financing liability for defined-benefit plans and long-service payments

The funded defined benefit pension plans consist entirely of insured schemes (as in 2024); there are no fund investments in equities, fixed-income securities or cash.

Reasonably possible changes as at the reporting date in one of the relevant actuarial assumptions (as mentioned below), with the other assumptions remaining constant, could affect the defined benefit pension obligations as shown below:

The combined effect of changes to more than one of the assumptions is likely to differ from the sum of the corresponding individual effects due to interactions. The effects presented apply only to the liabilities and not to the fair value of the investments. For a plan in the form of an insurance contract, the guarantee provided by the insurer means that the effects of these changes are largely mitigated by an equal effect on the plan assets.

The Group expects expenses of approximately € 61 million in 2026 (2025: € 47 million) in respect of defined contribution plans (including the above-mentioned plans with industry-wide pension funds). Expected contributions in later years are expected to be in line with this. The expected contributions to the insured plans also depend on the agreements made regarding a new indexation measure in those plans.