NETHERLANDS - PMT, the €28bn industry-wide pension fund for Dutch metal workers and technicians, has decided to maintain its current asset allocation strategy but increase the contributions required in a bid to pull up its funding position.
A statement issued by Pensioenfonds Metaal en Techniek said the fund will not pay indexation over the next five years but will instead gradually raise the total contribution to be paid between employees, employers and sponsors over five years from 15% to 18% of each individual's salary, minus the state AOW requirement.
A spokeswoman for PMT told IPE this is expected to increase the fund's cover ratio from approximately 80% at the end of February - having ended 2008 with funding meeting 87% of its liabilities - to the minimum regulatory requirement of 105% within five years.
Officials claim its indexation and contribution decision divides and balances the pain between all contributors and pensioners in tackling this shortfall, and means the governing board is not required to take more serious measures, such as cutting benefits.
Once the fund reaches a 105% cover ratio, it is anticipated indexation will then be resumed, and the fund is then expected to reach its 120% regulatory funding level within nine years.
The fund's asset allocation will remain largely unchanged from its position in 2007, stressed the spokeswoman, so the portfolio will continue to be roughly invested as 39% fixed income, 34.5% equities, 13% real estate and 13% in alternatives.
A major communication programme is now being launched, through letters, booklets and special meetings with all parties concerned, to inform PMT's 33,000 sponsors and over one million members of the recovery plan submitted to De Nederlansche Bank (DNB).
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