Full indexation at ABP

NETHERLANDS - Giant Dutch pension fund ABP is confident it can let its pension benefits grow in line with wage inflation, the newly-appointed head of ABP Dick Sluimers has said.

Sluimers made his remarks on Sunday during Dutch current affairs programme Buitenhof, though no decision has yet been made as the governing board of ABP will give a definite vote in November.

In previous years, the fund for Dutch civil servants and teachers, Europe's largest at €211bn in assets, was not able to index fully because funding levels were too low.

"The cover ratio is now to the level again, making full indexation is possible," if the fund's current financial position remains at the same level, spokesman Thijs Steger told IPE today.

He added: "ABP's ambition is complete indexation, but we have a policy in which the level of indexation depends on the cover ratio of the fund."

Late last month, Dutch pension institute Netspar argued pension funds should be obliged to disclose their approach to indexation.

In a report entitled "Efficiency and continuity in pensions: a closer look at the nFTK", authors Coen Teulings and Casper van Ewijk argued while the current system reveals only minimum pensions in nominal figures, what pensioners need to know is exactly how much their benefits will buy.

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