Government opposes pension fund hike

Ministers are opposed to plans by the civil service pension fund ABP to increase pension premiums for the next four years, warning that the move could cost jobs.

Home affairs minister Guusje ter Horst is to ask the unions which sit on the ABP board to back a pension pay-out reduction rather than a premium hike, the Volkskrant reports on Wednesday.
The increase in premiums will cost the government €600m a year. ‘There is no give left. This will cost jobs,’ a spokesman for the home affairs ministry told the paper.
Coverage ratio
ABP, one of the biggest pension funds in the world, said on Tuesday it is to raise its premiums in order to restore its coverage ratio, which has fallen to 83%, to the required 105%.
Premiums for both employers and workers will rise 1% this year and 2% in 2010, continuing for four years, ABP said.
The increase will cut the average civil servant’s take-home pay by €10 a month, the Volkskrant said.
In total, the fund wants to raise €5bn through the premium hike.

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