NETHERLANDS - The €5bn pension fund for KLM flight staff will grant all its participants a full indexation of 2.5%, following the relevant salary index.
The scheme indicated that its decision is based on its cover ratio, which had risen to almost 135% at the end of November.
The financial assessment framework (FTK) allows pension funds to offer a full compensation for inflation, if the funding ratio is over 130%, whereas schemes cannot increase pension rights at all as long as their cover ratio is under 105%.
The Stichting Pensioenfonds Vliegend Personeel - managed by pensions provider and asset manager Blue Sky - was the best performing of the three large KLM schemes, incurring an investment loss of ‘only' 9.2% last year.
The flight staff scheme has 2,800 active participants, 209 deferred members and over 2,000 pensioners.
The KLM pension funds for ground staff and cabin crews have reported cover ratios of 126.8% and 131% respectively at the end of November, but they have not yet decided on indexation.
Elsewhere, the €8.2bn pension fund for the printing industry PGB said it has postponed an indexation decision until the first quarter of next year.
Although PGB's cover ratio is just 108% the board argued its financial position had significantly improved, pointing out that its recovery plan had provided for a funding ratio of 100% currently.
PGB's indexation policy takes the consumers' index into account, which was 0.3% between August 2008 and August 2009.