NETHERLANDS - Bancassurer ING has for the fourth consecutive time declined to fund indexation for the 16,120 pensioners and 29,790 participants of its pension fund.

The sponsor company again cited "important reasons" - such as paying back a €3bn loan from the government - for not granting the conditional inflation compensation on 1 January 2012.

Its €13bn pension fund had requested funding for a 2.3% indexation, equating to approximately €170m.

At the ING pension plan, contrary to most Dutch pension funds, the indexation of pension rights of pensioners and deferred participants are not conditional to its coverage ratio, but funded by the employer.

Last year, an arbitrage committee of local judges agreed with ING that the company had important reasons indeed to refuse indexation on 1 January 2011.

The arbitrage was initiated by the ING pension fund in accordance with the contract between ING and its pension scheme.

ING said another reason for its decision had been the "challenging" process of dividing up its banking and insurance activities.

In addition, the bancassurer said it was bolstering its capital position due to ongoing uncertainty in the financial markets, as well as expected capital requirements stemming from Basel III and Solvency II.

The pension fund's participants council said it was astonished about the company's refusal, "as its net profit over 2011 was €5.8bn".

It added: "There seems to be always an excuse for not granting indexation. Uncertainty on the financial markets can continue for years."

The scheme's board said it was disappointed by ING's decision and that it was now deliberating whether to take legal action.