Dutch metal scheme PMT facing benefits cuts
NETHERLANDS - The €37bn Dutch metal scheme PMT is on course to cut pension benefits during the next round of measures, as its current coverage ratio nears the critical level.
At the end of November, the funding ratio for the country's largest market scheme was 91% - the board has indicated that a coverage ratio of less than 91.9% at year-end will trigger "additional measures" in line with its recovery plan.
It added that a rights discount before 1 April 2012 was also an option.
Because funding for the industry-wide scheme for metalworking and mechanical engineering is far below the required minimum of 105%, it has opted for a 1% increase in contributions to 30.3% of pensionable salary.
In addition, the pension fund will refrain from granting any indexation for the third consecutive year.
The premium increase will cost employees and employers €8 a month, according to Annemieke Biesheuvel, spokeswoman for PMT.
She said the scheme had now factored in the longevity predictions of Statistics Netherlands and the more recent forecast of the Actuarial Society (AG).
Biesheuvel added that the AG's figures had lowered PMT's coverage ratio by 3.5 percentage points, essentially cancelling out the fact long-term interest rates had increased by 0.25 percentage points to 3.14% in November.
PMT has more than 410,000 active participants - working for more than 34,000 affiliated companies - as well as 640,000 deferred members and 165,000 pensioners.