Dutch Pension Funds Face Cut in Pay-Outs

06 January 2012 (PLANSPONSOREurope.com) - The Dutch central bank has altered the way it calculates how much money pension funds should have in their reserves but 125 pension funds may still have to cut pay-outs in 2013, according to reports.

The Volkskrant reports the bank has opted to use a three-month average rather than the year-end interest rate to make the calculations because interest rates have been extremely low for a long period. The lower the interest rate, the higher pension fund reserves need to be.

The bank has also opted to limit the maximum reduction to 7%. On average, pensions will be cut by 2.5%.

The change means that 125 funds rather than 180 will need to make cuts next year, unless financial markets improve.
 

PLANSPONSOREurope Staff
editors@plansponsoreurope.com