Dutch funding ratios surge in fourth quarter – DNB
NETHERLANDS - The coverage ratio of Dutch pension funds has risen by 8 percentage points to 107% on average during the fourth quarter of 2010, pension supervisor De Nederlandsche Bank (DNB) has reported.
The DNB said the schemes' combined liabilities fell by €62bn to €699bn, mainly due to the rise of long-term interest rates, the criterion for discounting liabilities.
The drop of liabilities is the first since June 2009, when interest rates started a gradual decrease.
During the last quarter, the long-term interest rate rose again from 3% to 3.8%.
The regulator said research from both Statistics Netherlands and the Actuarial Society suggested longevity was rising faster than had been expected initially.
Assets, which have grown since March 2009, decreased slightly - from €753bn to €746bn - over the last three months of 2010.
The rise of the pension funds' combined equity holdings by €25bn to €269bn could not compensate for the €40bn loss on their fixed income investments, which totalled €338bn at quarter-end, the DNB said.
According to the regulator, the average coverage ratio of industry-wide schemes and company pension funds rose to 105% and 112%, respectively, whereas occupational schemes saw their funding rise to 117% on average in the last quarter.
The number of participants in a pension fund with a funding shortfall - a coverage ratio of less than 105% - dropped from 4.8m to 3m.