The Dutch central bank said the financial position of the country’s pension funds remains “worrisome,” although the average coverage ratio increased.
“The worrisome financial position of many pension funds is related to the decline in interest rates, which raised the market value of future obligations,” the Amsterdam-based bank said in its quarterly report.
The average coverage ratio of Dutch pensions rose to 103 percent last month from 95 percent in August. Funds have to increase their coverage ratio, or benefits relative to future payouts, to a regulatory minimum of 105 percent within five years, according to the central bank, which oversees the country’s 600 pension funds.
Seven pension funds will lower pension payments by between 2 to 5.9 percent to improve their financial position, the bank said. These cuts will affect 49,000 participants in the plans.
Bloomberg