Sections

Top Dutch pension funds unable to grant indexation, says DNB

Related images

  • Top Dutch pension funds unable to grant indexation, says DNB

NETHERLANDS - Dutch pension funds will increase pension claims and benefits only slightly in 2011 due to their precarious financial position, according to supervisor De Nederlandsche Bank (DNB).

The regulator, which surveyed the 25 largest pension funds in the Netherlands, said indexation was falling short of the pension funds' target, which is based on the increase of prices and salaries over the same period.

According to the DNB, most participants and pensioners will receive no compensation for inflation, while pension contributions will rise from 16.3% to 16.9% of salary.

Despite strong investment returns, the average coverage ratio fell from 109% to 107% last year.

The DNB attributed the decrease to rising liabilities following low long-term interest rates, as well as to rising longevity, which equated to approximately 5 percentage points. The indexation target for 2011 is 1.1% for workers and 1.2% for pensioners, the pension watchdog said.

In 2010, pension rights were increased by 0.4% on average, whereas the target was a 2.3% increase for active participants and a 1.7% increase for pensioners.

The DNB found that the value of accrued pensions and benefits had fallen short of the indexation ambition over the 2003-07 period.

The supervisor further concluded that an extra indexation in 2008 could not compensate for this shortfall at most pension funds.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

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

  • QN-2466

    Asset class: Multi-asset funds.
    Asset region: Global.
    Size: EUR 30m.
    Closing date: 2018-08-16.

  • QN-2467

    Asset class: Search for a broker (mainly ETFs).
    Asset region: Global.
    Size: 250m.
    Closing date: 2018-08-28.

  • DS-2468

    Closing date: 2018-08-24.

Begin Your Search Here