Dutch central bank adjusts interest rate calculation for pension funds
See more DutchNews articles in your Google search results
See more DutchNews articles in your Google search results
Add as a favourite source on Google Add DutchNews as a favourite source on Google
The Dutch central bank on Tuesday said it is changing the way in which the interest on pension funds is calculated.
Pension funds currently calculate the interest rate on pay-outs and premiums using the 4.2% rate laid down by the central bank.
That interest rate will now move with the market, bringing it down to the current 3.3%.
The change will affect coverage rates at pension funds, making them slightly lower, the Telegraaf says. This, in turn, will affect pay-outs and premiums.
The coverage ratios of the five biggest Dutch pension funds fell again in the first quarter of 2015, as low interest rates continued to have an impact.
Assets
The coverage ratio shows if a fund has sufficient assets to meet all its liabilities. Dutch pension funds should have a coverage ratio of at least 105%, meaning they have €105 for every €100 they need to pay out in pensions.
Despite doing well with their first quarter investments, the big four Dutch funds have all fallen below this 105%.
Thank you for donating to DutchNews.nl.
We could not provide the Dutch News service, and keep it free of charge, without the generous support of our readers. Your donations allow us to report on issues you tell us matter, and provide you with a summary of the most important Dutch news each day.
Make a donation