Dutch social affairs minister Aart Jan de Geus says he is no longer insisting on a one-year recovery period for pension funds whose coverage ratio drops below 105%. The matter had been a topic of sharp debate within the industry.
An exception should be possible in individual cases, and depending on specific circumstances, he explained in a further specification of the new financial assessment framework FTK, a part of the Pensions Bill. A longer period will only be allowed if it is clear there’s no extra chance of added disadvantage such as lower pensions rights, de Geus indicated.
Another condition is that the maximum use of the contribution and indexation instruments offer sufficient chance of hitting the target within the extended recovery period.
“A three-year term is usually adequate, considering the consequences for surcharge and value transfer,” the minister said.