NETHERLANDS - The €180bn civil service scheme ABP will grant its participants indexation of 0.45% in 2010, as its funding ratio has recovered to the minimum required level of 105%.
ABP's board also said it wants to raise the contribution paid by 0.3 percentage points, to 20.3% of the pensionable salary.
That said, the ABP fund's improved funding position means it has also decided to cancel the temporary 1% recovery levy which it imposed on 1 July 2009. Officials said they will not now introduce the extra 2% recovery levy that was planned from 1 January 2010.
According to officials, the 0.3% rise in the premium is necessary to compensate for increased numbers of members who are working longer and will receive a larger pension as a consequence.
ABP is aiming to follow the salary index for civil servants and teachers, which was found to be 2.2% in 2009.
The scheme's policy is to compensate for indexation that could not be paid in earlier years, if its cover ratio is over 135%.
The ABP board said its intention is to keep the contribution level unchanged at 20.3% for the next three years, although new legal measures or changes in the scheme's financial position could scupper its indexation plan, so officials said they will reassess the fund's position again in May 2010.
Both the employers' council and the participants council have been asked to present guidance over the indexation decision, but they have yet to deliver their verdicts.
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