NETHERLANDS - The four largest pension funds in the Netherlands, ABP, PFZW, PMT and PME, saw their assets collectively drop by €71.6bn last year as a results of the credit crunch.
Announcing their results of the fourth quarter of 2008 today, all four revealed their schemes are now in an underfunded position as all cover ratios hover at around 90%.
ABP, the largest Dutch scheme, lost €44bn over the year and said its assets under management (AuM) had dropped to €173bn by the end of 2008. Its cover ratio at the time was 90% - half of what it was in the previous year.
PFZW, the pension fund for the care and welfare sector and the second-largest pension fund in the Netherlands, recorded a €18.1bn drop to €71.5bn. The cover ratio is now 92%, after dropping 56% in the year.
Both ABP and PFZW generated an average negative return of 20.2% in 2008 but the worst performing of the four was was metal fund PMT with a -20.6% return, while the smaller PME said its return was -17.8% over the year.
PME's AuM now stand at €18.7bn, down by €3.7bn, while PMT has lost €5.8bn with assets at the beginning of the year, to stand at €28.7bn.
All four funds have decided not to index pensions this year, though ABP said it will review this decision on 1 July. Additionally, both PMT and PME have raised their contribution rates by 1%.
VB, the Dutch organisation for industry-wide pension funds, said most of its pension fund members saw their cover ratios drop below the required 105%, and are thus underfunded.
The organisation estimates the current cover ratio of most pension funds is now between 85% and 100% .
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