NETHERLANDS - The Dutch pension regulator DNB and the ministry of social affairs today announced pension funds will not have to submit recovery plans before April next year.
The decision was made after emergency talks between the ministry, the DNB and representatives of the pension sector, the DNB said in a statement late today.
"On the basis of these talks, the DNB has decided to grant a delay to pension funds regarding the submission of recovery plans until April 1, 2009," the DNB said in a statement.
Depending on their specific investment risks, most pension funds have a reserve shortfall when their funding ratio drops below 125%.
In this case, the financial assessment framework nFTK requires schemes to submit a 15-year recovery plan.
Underfunded schemes with a cover ratio of less than 105% must inform the regulator of how they expect to improve their position within three years.
The DNB said it had made the decision in correspondence with its letter to pension funds last month, urging them not to make any hasty decisions regarding contribution rates and indexation, but to first do an in-depth analysis and make a decision by the end of this year.
The regulator was forced to release the statement last month after pension funds had openly criticised it for apparently forcing pension funds into a fire sale of their equity holdings.
At the end of last month it appeared that cover ratios of Dutch pension funds had deteriorated considerably to an average of 109% on average, DNB president Nout Wellink said.
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