NETHERLANDS - The financial position of the €37bn Dutch metal scheme PMT has recovered to such a degree that a benefits cut in early 2012 will be unlikely, according to Jan Berghuis, employees chairman.

Benne van Popta, chairman for employers at PMT, said the scheme had been able to counter increasing liabilities resulting from falling interest rates and rising longevity due to the expected returns of 11% over 2010, as well as the positive effects of its recovery plan.

Despite rising liabilities, the coverage ratio for the industry-wide scheme for metalworking and mechanical engineering had increased to 96% at year-end, the chairmen said.

They added that, with this funding level, the Pensioenfonds voor Metaal en Techniek is now ahead of its 2009 recovery plan.

According to Berghuis, an evaluation of the recovery plan - to be submitted to pension supervisor De Nederlandsche Bank (DNB) in February - will include a 1% contribution rise to 17.1% of salary.

What is more, PMT has also refrained from granting indexation, which has caused a 4.4% loss of buying power to its pensioners since 2009, Berghuis said.

If pension funds fail to recover to the required minimum funding of 105% this year, they must consider additional measures, such as benefits cuts, before 1 April 2012.

PMT is the largest market pension fund in the Netherlands, serving more than 34,000 companies with 410,000 workers, 600,000 deferred participants and 165,000 pensioners.