VB joins pressure for more recovery time
NETHERLANDS - Gerard Riemen, director of the Dutch association of industry-wide pension funds (VB), has joined several unions and employer representative bodies in their plea to give pension funds more time to recover.
A spokesman for the VB told IPE today Riemen had contacted the Dutch central bank (DNB) to urge the regulator to examine each pension fund individually and decide if the period of three years mapped out for the recovery plan could be extended.
"We should not hold on to the three-year term too stringently, but rather nuance it," he said.
According to a survey into the preliminary annual results for 2008 of its own members, VB now estimates the average cover ratio is around 90%, and pension funds are therefore underfunded.
"Pension funds have done two things: they have decided not to index and some have opted to raise their contribution rate. Nothing else has been done so far," said the spokesman.
The DNB claimed in media reports today whether pension funds should be granted more time to recover is a political matter, as Dutch pension law states the period of three years.
The Dutch employer organisation for the metal industry and union CNV had already argued earlier this week pension funds need more time to recover from the global economic downturn than the current regulated timeframe. (See earlier IPE story: More time needed for Dutch recovery)
Piet Hein Donner, the Dutch minister of social affairs, warned on Wednesday delaying recovery has its risks, and argued postponing painful measures, such as increasing contribution rates and lowering pension payments, could be dangerous.
The four largest pension funds in the Netherlands, ABP, PFZW, PMT and PME,yesterday revealed they have seen their assets drop by €71.6bn as a result of the credit crunch.
Subsequently, ABP, the largest Dutch pension fund, warned signs of a structural recovery on the equity markets are scarce, adding that "current market prices show that a long-term recession has been calculated in."
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