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Pension fund for Dutch pharmacists forced to halve fixed indexation

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SPOA, the €1.2bn occupational pension fund for Dutch pharmacists, is to cut its annual fixed indexation of 3% in half as part of new pensions arrangements. 

In its newsletter, the scheme told participants that the reduction of tax relief for pension premiums had been the chief driver of the new plan, which also increases the contribution to 22.7% of pensionable salary.

It also cited the fact that an increasing number of pharmacists have entered the workforce.

Under the new pension plan, the annual accrual will be 1.3% of salary up to €75,000.

Participants will have to oversee additional pension arrangements themselves.

A new element in the SPOA scheme will be the introduction of a partner pension, for which more than 1.3% will be accrued annually.

However, the partner pension will not be eligible for the annual fixed indexation, SPOA said.

The pharmacists’ scheme raised the target age for retirement to 67 but made clear that it would allow participants to retire as early as 55.

SPOA has set the franchise – the amount of the salary exempt from pensions accrual – at €12,462, and has abolished the option to accrue a higher pension, “as only a limited number of participants used this option”.

However, the pension fund did not confirm whether it would maintain its additional variable indexation, which is based on returns and the scheme’s coverage ratio.

Due to the pension fund’s financial position, it has been unable to grant additional inflation compensation for several years now

Since 2011, the scheme has had to cut pensions rights four times, with successive discounts of 5%, 7%, 6.8% and 4.6%.

As of the end of February, its funding ratio was 105.9%.

At the end of 2013, the pension fund reported nearly 5,000 participants, consisting of approximately 2,765 active members and 1,160 pensioners.

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