Pension crisis: 7.5 million face lower payments, says central bank

Some 7.5 million Dutch people face a lower pension than they expected unless their pension funds manage to bolster their assets by the end of this year, the central bank said on Monday.


In total, 103 pension funds will have to take steps to improve their finances to make sure they have enough assets to meet their obligations, the bank said in a statement. The 7.5 million is made up of people who have already retired, people still in work and sleepers who have changed jobs.
In total, 340 pension funds submitted a recovery plan to the central bank in 2009. They must have a coverage ratio of 105% by the end of 2013. Of those funds, 103 are behind schedule and will have to make an extra effort, including increasing premiums and cutting payments.
Economy
A final decision will be taken on which funds have to make cuts at the end of this year. If interest rates have improved and the euro crisis has been solved, lower pensions may not be necessary.
On average, funds are considering a 2.3% pension cut but 34 funds would like to reduce pensions by more than 7%, the central bank says.
The federation of Dutch pension funds is due to publish a list of 80 of the funds later on Monday. Not all pension funds have agreed to go public with their financial position.
ABP, the civil service pension fund which is one of the biggest in the world, is among those making cuts.
Earlier stories
Companies reluctant to help out troubled pension funds
125 pension funds will have to cut pay-outs


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