I can just imagine their queen 'let them eat cake' lol!http://www.dutchnews.nl/news/archives/2012/07/pension_cuts_loom_for_millions.php
Pension cuts loom for millions as funds' financial buffers shrink
Thursday 19 July 2012
The country’s biggest pension funds,
including the giant civil service fund ABP and healthcare sector fund
PFZW, will very probably have to cut payouts next year because of
reduced financial buffers.
The funds, which pay pensions to 7.5 million people, have as yet
failed to boost their coverage ratios up to the legal levels, due in
part to low interest rates.
For example, the coverage ratio at ABP, which is the third biggest
pension fund in the world, fell back to 90% in the second quarter of
this year, compared with 112% in the year earlier period.
By law funds are supposed to have a coverage ratio of 105%, meaning
they have €105 for every €100 they have to pay out in pensions.
‘There is a very real chance that measures announced earlier,
including lowering pensions, will become a reality from April 2013,’ a
spokesman for the pension fund umbrella group Pensioenfederatie said in a
ABP said earlier it will decide in January whether to cut all
pensions by 0.5% but according to Nos television, the fund may now be
forced to take ‘serious and extreme’ measures.
PFZW, which provides pensions to some 2.5 million people, had a
coverage ratio of 92% in the second quarter and is also considering a
Two engineering funds, PME and PMT, have coverage ratios of 88% and
85% respectively. They both say pension cuts of up to 7% are ‘more or
Social affairs minister Henk Kamp said in May he is considering
changing the way interest rates are applied to pension fund assets, in
an effort to strip out the effect of interest rate volatility.
The funds are now calling on the government to take urgent action on
this. ‘This situation needs crisis measures in the short term to prevent
us from having to take decisions which will have a major impact on our
policy holders and the economy,’ ABP chief Henk Brouwer is quoted as
saying by the NRC.
Kamp is also drawing up draft legislation to help funds switch from
being based on ‘defined benefits’ – where people know in advance how
much pension they will get – to ‘defined contributions’, which fixes
‘We are looking at what is necessary to make sure our pension system
is sustainable in the long term,’ a spokesman for Kamp said.
The Nos monitors the coverage ratio of over 100 pension funds and
says only eight are now above the legal 105%. Unilever’s corporate fund
has the highest financial buffers with a coverage ratio of 121%.
The lowest ratio belongs to the meat packing sector at 78%. Its fund has already announced a 7% cut in pensions next year.
According to the Dutch central bank, the Netherlands has Europe’s
biggest pension industry, with €913bn in assets at the end of the first
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