Funding ratios much lower intervention by DNB – Yahoo! News

The adjustment of the discount rate for the Dutch pension funds by De Nederlandsche Bank (DNB), the coverage down to an average of 3 percentage points down.

DNB suppressed by adjusting the UFR, the discount rate for the period after 20 years, the financial recovery of the large metal funds PMT and PME heavily in the head. The direct consequence is that indexation of pensions in the funds even further into the future is shifted. Health and Social Care Fund also feels the surgery.

In the second quarter the so-called policy of PMT coverage just from 102.6 to 103.5 percent as yields attracted. But when the new calculation method is used, the coverage by the end of June only comes out at 100.2 percent. PME saw its financial situation is also improving lately. However, the operation of DNB is a step back in that recovery. According to the fund gets its current funding level will a bite of 2.4 percentage points.

Elementary building
Premiums in the metal funds have recently been firmly put for a long time. They will not go up, they let it be known on Tuesday. However, the probability that participants at a level premium exists soon build up less pension. ,, A reduction in pensions is not yet an issue, ” stressed PME. ,, But it does increase the chances. ”

Young funds hit hard
The coverage shows the extent funds to meet their obligations. When a young fund with many active employees in the file, this indicator falls as a result of the new calculation according to DNB, even to 6 percentage points.

Young Care and Welfare Fund, where many active nurses and doctors are active, collapses under its own calculations “only” 3 per cent in the coverage ratio.

ABP
Even with the largest pension fund in the Netherlands, officials ABP, the experts were still busy calculating all the consequences. DNB announced Tuesday to lower the discount rate, an adjustment in the calculation. According to the regulator which intervention is necessary due to the low interest rates in Europe.

An older fund like ABP with relatively many pensioners hit less hard by the adaptation of DNB. Especially the pensions of 40, 50 and 60 are today more expensive. At ABP will therefore decrease the funding by around 2 percentage points.

Continue falls
UFR will surely continue in the coming year fall by a steady decline in the average interest rate on the capital market, making the coverage ratios fall further. Calculations show coverage eventually agreed to drop by 10 percentage points.