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Dutch pension funds for pharmacists, meat industry facing largest cuts

NETHERLANDS - The €1.7bn pension scheme for the meat, snacks and poultry sector (VLEP) and the €1bn scheme for pharmacists (SPOA) are facing the largest discounts of the 125 Dutch funds likely to cut pensions next year.

VLEP, with a coverage ratio of just 83.2% at the end of last year, was the worst hit of all large and medium-sized pension funds.

Pension funds with recovery plans must improve their funding ratios to 105% by the end of 2012.

Having already raised contributions by 1.5% and decreased annual pension accrual to 1.7%, VLEP said was now considering additional measures.

The pharmacists scheme, which had a funding ratio of 83.3% at year-end, has already announced a 2.8% discount as of 1 April.

However, a further increase is “likely”, a spokesman told IPE.

Meanwhile, a spokesman for the €3.2bn pension fund PNO Media said the scheme was expecting a rights cut of 6% after it reported a coverage ratio of 90.7% in December.

It has already raised contributions by 1 percentage point.

The €662m scheme for notaries staff also confirmed that it was exploring discount measures in the coming weeks to tackle a fund ratio of 89.5%.

Despite the pensions regulator’s recent easing of the discount rules for liabilities - as well as an earlier rights cut of 2.1% - new cuts are likely, the pension fund said.

The €1bn occupational pension fund for notaries has a coverage ratio of 90.6%. It plans to present new recovery measures next month.

The €266m Stichting Total Pensioenfonds Nederland said it had already decided on a rights discount of 1.95% for all its participants after reporting a funding ratio of 92.7% at the end of October, when it was 5 percentage points short of the scheme’s mapped out recovery.

It added that a second and similar cut might be applied on 1 January 2013 if its financial position failed to improve sufficiently.

After reporting a coverage ratio of 92.5% in November, the €8.6bn pension fund for the retail sector has increased its premium from 16.2% to 18.5%. This will be followed by a further increase to 19.4% next year.

In addition, the retail scheme has decreased the pension accrual from 1.85% to 1.75% for the next five years.

The €5bn industry-wide scheme for sheltered workshops (PWRI), which had a funding of 95.3%, said it would decide on any cuts at the end of 2012. It will evaluate its recovery process in February.

However, PWRI recently increased its contribution from 16% to 17.1%.

Finally, the €2.7bn scheme for architects is working on measures for a discount of “a few percent” - the scheme’s funding ratio is 93%, 2% short of its recovery target at year-end.

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