NETHERLANDS - No more than four Dutch pension funds are likely to apply additional benefits cuts on 1 April 2012, a survey by the Pension Federation has suggested.

The recovery of almost all pension funds is on schedule, or even ahead of schedule, according to the umbrella organisation for the three pension fund lobbying groups.

Furthermore, during the last two months of 2010, coverage ratios have risen, thanks to increasing interest rates and recovering financial markets. The Pension Federation said the improvement also exceeded the effect of the new longevity forecast.

However, the four pension funds have been unable to benefit sufficiently from the increasing interest rates - the criterion for discounting liabilities - as they had hedged the interest risk, the federation said.

The schemes in question include the industry-wide pension fund for the meat and cold meat industry (Vlees- en Vleeswaren, or VLEP) and the pension fund for culture (Cultuur), which have funding ratios of 96.9% and just over 90%, respectively.

The company schemes of glasses manufacturer Royal Leerdam and ISS are also likely to decrease pension benefits, the Pension Federation said.

According to the representative organisation, the combined number of participants involved is 90,000, of which 5,000 are pensioners, which is less than 1% of all participants of Dutch pension funds.

Gerard Riemen, director of the Pension Federation, said: "The number of workers and pensioners that might be hit seems to be relatively limited."

The federation had asked all its members to report expected benefits cuts, in order to prevent uncertainty among participants. Last year, the outgoing social affairs minister Piet Hein Donner announced early benefits cuts at 14 pension funds without revealing their names.

In May, pension supervisor De Nederlandsche Bank will present a definitive list of pension funds that are likely to cut benefits, based on the submitted evaluations of recovery plans.
 

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