Pension funds seek fresh delay to indexation label
NETHERLANDS - VB and OPF, the main lobbying organisations for the Dutch pension funds, have called for a further delay to the introduction of the indexation label, as officials say the financial situation is still too unclear to be able to deliver sound forecasts.
"Because most of the pension funds are still busy writing their mandatory recovery plans, it is difficult to get a proper picture of future indexation," said Marjolein Zaal, of the Association of Industry-wide Pension Funds (VB).
And Frans Prins, director of the Foundation for Company Pension Funds (OPF) also added: "We are wondering how to proceed, now [pension funds] are in a worse situation than the worst-case scenarios were based on. At present, it is simply impossible to look into the future."
The pension label- indicating the ‘indexation quality' of pension funds - is now scheduled to be introduced on 1 April, having initially been postponed from its earlier launch date of 1 January 2009.
This latest plea from pension funds' representative organisations also comes as social affairs minister Piet Hein Donner has suggested many pension funds will not be able to grant indexation over the long-term.
Pension contributions are already so high there is little space left for a further rise, explained Donner in an update to parliament about the financial problems at pension funds.
"As a long-term omission of indexation can have a considerable financial impact on schemes' participants, the social partners of workers and employers will need to take measures to keep pensions sustainable," said the minister.
The cover ratio of many Dutch pension funds has dropped below the required minimum of 105%, resulting in schemes not being able to pay anything to compensate inflation for at least 2009.
At the same time, however, Donner stressed refraining from paying indexation would not lead to a decrease of the present pension liabilities of pension funds.
He again argued raising the official retirement age to above 65 - as a way of easing the pressure on pension funds - might be discussed during the planned consultation with the pensions sector and regulator De Nederlandsche Bank later this month.
He also suggested it would be sensible to evaluate ‘elements' of the financial assessment framework (FTK).
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