Dutch pension funds facing rights cuts of as much as 9%
NETHERLANDS - The €114m pension fund for human resources consultant GITP has confirmed it will cut its pension rights and benefits by at least 7% in April 2013 if its financial position fails to improve sufficiently this year.
With a coverage ratio of 87.9%, the GITP scheme actually needs to apply a 9.2% discount to recover to a funding of 104.1%.
But it said it would stick with the maximum cut of 7%, as stipulated by the pensions regulator recently.
However, the pension fund indicated that additional cuts of 2.2% could be necessary at the end of 2013 if it fails to meet its recovery target by then.
It added that it still needed to decide exactly how the cuts would be implemented.
The GITP is one of several Dutch pension funds to have acknowledged possible discounts before the Pension Federation presents its official list on 20 February.
The €217m pension fund of technical services provider Imtech said it was facing a discount of between 6% and 7%, if its current funding of 91.9% fails to increase during 2012.
It said the anticipated cuts were at least twice as large as previously expected, adding that its contribution would remain at 25% this year.
The €1bn occupational pension fund for notaries SNPF said a cut of 5.8% appeared to be "inevitable" due to its coverage ratio of 90.6%.
The notaries scheme already applied a discount of almost 2% in January 2011.
The SNPF board said it had refrained from increasing its contribution due to the impact of current economic climate on the profession. Dutch notaries have been hit particularly hard by the slump in the housing market.
Elsewhere, the €2bn industry-wide pension fund for the cleaning sector announced likely cuts of 1.2%, in light of its funding level of 97.1% at year-end.
The large metal pension schemes - the €41bn PMT and the €26bn PME, with coverage ratios of 88.2% and 90.9%, respectively - are expected to publish their estimates for cuts on Monday.
Earlier, the €246bn civil service scheme ABP announced a rights cut of 0.5%, together with a contributions increase of 2 percentage points.
The €111bn healthcare scheme PFZW, which had a funding ratio of 97% at year-end, said it would probably manage to avoid a discount.