Dutch companies are looking to cut the spiralling cost of pension provision with Akzo Nobel, the chemicals and drugs company, pushing to replace its defined benefit arrangement with a defined contribution fund.

Unions are opposing the idea and Akzo Nobel is negotiating how to move forward. A company spokesman said Akzo Nobel wanted to move away from a situation where the performance of its €3.4bn ($4.1bn) pension fund is being reflected on the company's balance sheet. The fund returned 3.2% over the five years to the end of 2003, and 11.5% last year alone, ahead of the average for Dutch pension funds.