The Dutch Association of Industry-wide Pension Funds said most pension funds are not expected to keep pace with inflation and wage increases this year. Some pensions will have to raise premiums and lower pension payments.
The four biggest Dutch pension funds said on Thursday that their buffers have been eroded by falling stock prices and interest rates and they no longer meet the obligatory 105-percent coverage ratio. All four funds are freezing pensions this year.
A ratio of 105 percent would ensure that pensions can meet more than their pension obligations.
The civil service pension fund ABP, one of the biggest pension fund in the world, said its coverage ratio had fallen by over a quarter to 90 percent in the final quarter of last year.
The fund wrote off EUR 22 billion because of the financial crisis. "This crisis is the most serious ever to hit ABP," said chairman Elco Brinkman.
Health service pension fund Zorg en Welzijn, which has some 2.1million clients, lost EUR 16 billion in the financial crisis. Its coverage ratio dropped from 126 percent to 92 percent in the fourth quarter.
Light engineering fund PME said it is to hike premiums by 1 percent.
The Association of Industry-wide Pension Funds on Thursday called on the Dutch central bank to give pension funds more time to get their investments in order.
Source: FOCUS Information Agency
