ABP, other big pension funds, warn of need to cut payouts
A number of big Dutch pension funds, including civil service fund ABP and healthcare worker fund PGGM, fear they may have to cut payouts in 2012, the Financieele Dagblad reports, without quoting sources.
The funds, all due to report crucial coverage ratios on Friday, have been hit by low interest rates and want caretaker social affairs minister Piet Hein Donner to relax pension rules in compensation.
The rules state pension funds must take action if their coverage ratio – the amount of money needed to pay all their pensions compared with their assets – goes below 105%.
In August it emerged 14 small funds were faced with cutting pensions because their assets had shrunk.
The FD says the five big funds, which also include the engineering sector fund, are planning to take out newspaper adverts on Friday to explain to contributors why their reserves have not improved.
Donner is not keen to relax the rules. He wants parliament to put up the pension age to 67 instead.
ABP is one of the biggest pension funds in the world. If it alone cut pensions, millions of people would be hit.
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