NETHERLANDS - The Dutch Association of Industry-wide Pension Funds, the VB, says the premiums at 16 of its 82 member funds still fall short of cost price.

The Vereniging van Bedrijfstakpensioenfondsen said the issue affects 1.3 million members.

"Premiums at 16 funds still fall short of cost price," the association said in a release. "These funds have a combined 1.3 million members." But it said that funds were increasingly moving towards cost-covering levels.

"Pension funds have been forced to push up premiums and curb indexation percentages in order to bolster their financial position," the VB said, adding that financial ratios have been pressured by the rising wages in the late 1990s, low interest rates, falling share prices and low premiums.

Earlier, the VB said that cover ratios at its members averaged 111.2% at the end of 2003.

The VB said premium levels at industry-wide funds rose by 17% on average at January 1, after adjustment for number of employees - and that around 80% had set premiums at cost-covering levels or higher.

That represents two-thirds of the 4.6 million active pension scheme members.

Pension levels rose by an index-linked margin of 1.6% on average.

The VB's members represent more than 75% of Dutch employees who participate in pension schemes.