The €403bn Dutch civil service scheme ABP has announced a contribution rise of 1.8 percentage points to 22.9% in 2018.
The increase follows a decision made to annually raise premiums over the period 2017-19, as pensions have become more expensive as a consequence of low interest rates and rising longevity.
ABP again refrained from granting indexation, which would only be allowed if its coverage ratio was at least 110%. At October-end, funding was 100.2%.
The scheme said it did not expect to be able to grant any indexation for the next five years.
It said indexation in arrears – based on the consumer prices index – since 2009 has accumulated to 13.5%.
According to ABP, the possibility of pension benefit cuts in 2018 had become slim, but it conceded that the possibility still existed further into the future.
If its coverage ratio was still short of the required minimum level of 104.2% in 2020, a cut to pension rights would be inevitable, the scheme said.
Earlier this month, the €189bn healthcare scheme PFZW decided to keep its contribution for 2018 at 23.5% of pensionable salary.
The three other large Dutch pension funds, the metal schemes PMT (€68bn) and PME (€46bn) and building sector pension fund BpfBouw (€55bn) are expected to announced their contribution rates for 2018 in December.
ABP and PFZW were among the schemes highlighted by supervisor De Nederlandsche Bank earlier this month as still in danger of having to cut pensioner benefits.
No comments yet