DNB approves ABP and PFZW recovery plans
NETHERLANDS - The pensions regulator, De Nederlandsche Bank, has approved proposals presented by the ABP and PfZW pension funds for recovery of their plans assets.
PFZW said in a statement that its recovery plan to raise the minimum cover ratio to 105% of liabilities within five years has now been approved by DNB.
That means it will continue with its strategy of paying no indexation to members during the recovery period, though it may pay up to 50% indexation once the figure crosses 105% and contributions will remain unaltered - as will investment strategy and pension scheme terms.
Peter Borgdorff, director of Pensioenfonds Zorg en Welzijn, said: "The adoption of the plan is an expression of confidence in our policy to return the required financial buffers built up."
At the same time, a spokeswoman for ABP confirmed that the industry-wide pension fund for civil servants has also received approval to go ahead with its recovery plan.
ABP said in March that it would temporarily increase contributions by 1% from July and by another 2% from 1 January 2010, to make total contributions worth 23.3% from next year.
It had also planned to reduce the risk in its investment portfolio - reducing its predicted investment return from 6.8% per annum to 6.1% on average over the next 15 years - as part of a move to raised its funding ratio to 125% by 2022.
If funding is above 105% within four years, the fund will also begin to pay indexation.
Elsewhere, a spokeswoman for the pension fund for metal and electrical workers (PME) said it expects to gain approval for its recovery plan any day now.
Latest figures show the fund is still attempting to improve its cover ratio but saw no movement in June as the cover ratio was still 94% at the end of June - the same as in May.
PME has vowed to publish the cover ratio at the end of every month until it reaches 105%.
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