Dutch scheme DSM postpones proposed changes
NETHERLANDS- Dutch chemicals group DSM has announced that alterations to its e9bn pension fund regulations are to be postponed due to poor performance.
Alterations included improvements in pension provisions for widows, and for employees forced to retire as a result of bad health. One of the key changes that would have come into force was lowering the age of retirement from 65 to 62.
The new arrangements have been under discussion for some time and were to be introduced at the beginning of August for tax purposes, but DSM announced that underperformance the pension funds has delayed their introduction.
A spokesman at DSM explained “our pension funding level is set at 125%, but as a result of losses in real estate and equity markets, this level has dropped to 123%. The unions have agreed with DSM to postpone the modifications until markets are more stable and the funding level returns to 125%”. DSM Pensioenfonds currently manages around e9bn in pension funds.
The regulations would have been warmly welcomed by DSM Pensioenfonds’ 21,000 members following the unpopular proposals by the new Dutch government of changes in legislation which would effectively force workers to remain in employment until 65.
In July the three-party coalition announced in its manifesto plans to cut tax exemption levels for contributions to occupational schemes from 2% to 1.75%.
Under the new proposals someone saving the maximum tax exempt amount from age 25 to 60 would receive a pension that is 61.5% rather than 70% of their final salary.