NETHERLANDS - The industry-wide metal scheme PMT is claiming to be the first to have fully repaired the loss of buying power of the past five years, by granting an indexation of 2.36% for its active members and 2.79% for deferred participants and pensioners.
PMT, the Pension Fund for Metalworking and Mechanical Engineering, will pay its participants the full regular indexation of 1% for its active members, and 1.29% for its pensioners and workers who have left the scheme, it said.
On top of this, PMT has granted - for the third year in succession - an ‘overtaking' indexation. Moreover, the scheme will lower contributions from 26% to 25.2% next year, it added.
PMT's decision has been made possible by its present financial position means the scheme - based on the market value of its liabilities - has a coverage ratio of 148%.
The scheme's expectations are ‘modestly positive' for 2008.
According to PMT total costs of the indexations are approximately €643m.
"The repair of buying power is mainly thanks to the spread of risks in our investment portfolio," Bert van de Belt, chief executive of PMT, pointed out.
"It has become clear that this diversification can cushion the turbulence in the financial markets caused by the sub-prime mortgage crisis," he continued.
PMT is the largest market-based pension fund in the Netherlands as it has 33,000 associated companies, over one million members and assets under management totalling €34.5m.
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