NETHERLANDS – Glass manufacturer Royal Leerdam has reported the lowest coverage ratio of over 50 pension funds and is expected to cut benefits by 7% both this and next year, according to a provisional list of rights cuts compiled by the Dutch Pension Federation.

The association compiled a list of cuts to benefits the 51 schemes would have to implement in order to increase their coverage to the minimum required funding of 105% by year-end.

As a consequence, the Royal Leerdam fund will apply a 7% rights cut on 1 April, to be followed by an equal discount next year due to a funding ratio of 84.9%.

However, the largest single cut is to be carried out by the pension fund of Norit – a provider of activated carbon – which has announced a 10% cut this year as a result of a 97.5% funding ratio.

Most underfunded schemes have chosen to limit their discount to 7% this year, as allowed by supervisor De Nederlandsche Bank (DNB).

The regulator said that 68 schemes – with combined assets of €410bn of the 415 Dutch pension funds, must cut pension rights this year, affecting 2m active participants, 1.1m pensioners and 2.5m deferred members.

The 51 schemes announced cuts varying between 0.5% and 7%, and equating to 1.9% for participants on average.

Earlier, the €281bn civil service said that it would cut pension rights by 0.5% this year, adding that an additional discount of 1.6% is still possible next year.

"It is for the first time in history that so many workers and pensioners are facing such a decrease of pension rights," commented the Pensions Federation.

"Although 80% of the pension funds don't have to apply a discount, the participants and pensioners of most of them have been affected as well, as they haven't received compensation for inflation," the lobbying organisation added.