Millions of pensioners may be hit by new cuts in their corporate pensions this year because of falling returns on their investments.
The civil service pension fund ABP, which is one of the biggest funds in the world, has warned pensioners there is a ‘very real chance’ payouts will be cut again this year.
The two engineering funds PME and PMT have made similar warnings. All three funds cut pensions earlier this year. The health service fund also considers it likely it will have to cut payouts.
Research by Nos television shows many more funds may have to make cuts because they do not meet the required 105% coverage ratio.
The first-half financial results for almost 70 funds show 70% of them are failing to meet the target and 43% are below 100% – meaning they don’t have enough money to meet all their obligations.
ABP, which has 2.8 million members, currently has a coverage ratio of 97%, Nos says.
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