Funding levels discussed

The Dutch pension regulator, the PVK, has raised the possibility of a 19-point increase in the minimum funding level in a consultation document.
The Pensioen- & Verzekeringskamer has sent the Dutch Association of Industry-wide Pension Schemes, the VB, a document which envisages raising the level to 130%.
A spokesman for the PVK confirmed: “We have sent a document to the VB, it is a rather technical matter.” The spokesman however declined to discuss the document further as it was still going through a consultation phase and became official in mid-October.
A spokeswoman for the VB, which is currently co-ordinating the consultation, said the level could rise to 130%. She added there was an on-going consultation about technical details such as calculation methods.
Speaking about the possible impact on pension funds’ investing policies, the spokeswoman said it was still a matter confined to calculation methods.
Michel Meijs, spokesman for the e156 bn civil service scheme ABP, said: “At present pension funds are involved in a consultation by the PVK on the basis of a concept sent by the PVK. The VB coordinates this consultation.” He declined to make any further comment.
A consultant, who asked not to be named, said it was difficult to forecast how pension funds might respond to any change.
The consultant said that that pension funds could opt for long- or short-term solutions, depending on conditions and their relationship with the trade unions.
Possible short-term solutions, which the consultant said cannot last long, include the temporary suspension of pension indexation and the raising of contribution rates.
And schemes would also review their asset allocation, possibly changing their allocation to equities.
A long-term solution for funds would be to change their pension promise and alter their structure.

Have your say

You must sign in to make a comment


Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2570

    Asset class: Direct Real Estate.
    Asset region: Europe excluding Switzerland.
    Size: 150m.
    Closing date: 2019-10-30.

Begin Your Search Here