PGGM shifts to full indexation
NETHERLANDS - The Dutch PGGM fund, at €88bn the second largest in the Netherlands, has said it will fully index its pensions from the beginning of next year.
PGGM's board today also announced it will not make any changes to its pension contributions rates in 2008.
René van de Kieft, chief financial officer at the fund for healthcare and social workers, said in a statement the move was thanks to PGGM's strong financial results.
"Just as last year, we can keep the prosperity level of the pensions on the same level without having to ask for a higher contributions," he added.
PGGM said its cover ratio at the end of September this year was 153%: "According to the indexation guidelines pensions can be fully indexed with such a cover ratio. The indexation is 1.82%."
In May this year, pension fund ABP also said it is confident it can allow its pension benefits to grow in line with wage inflation, though a decision about indexation will be made on November 26 by ABP's governing board.
In previous years, the fund for Dutch civil servants and teachers was not able to index fully because funding levels were too low.
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