The so-called policy coverage, the average funding ratios of the last twelve months, came late June, at 99.6 percent. That is 2.3 percentage points lower than three months earlier, reports De Nederlandsche Bank (DNB) on Tuesday.
The coverage ratio rose slightly in the same period from 96.3 percent to 96.6 percent. The coverage ratio is the ratio between the assets and liabilities of pension funds. The percentage shows the extent to which a fund’s ability now and in the future to pay out pensions.
Investment
Pension funds gained in the second quarter more return on their investments. At the same time their obligations have also grown due to lower interest rates. At lower interest rates should have a fund relatively more cash in hand to meet the requirements.
The funding could increase slightly because of the increase in liabilities was slightly less than that of the investments. But because this coverage ratio is lower than a year ago, the policy coverage (the average over twelve months) still declined.
Funding shortfall
The funds must meet a minimum funding requirement, which for most funds at or slightly above the 104.2 percent. A number of pension funds does not meet at this time that regulatory minimum. When these funds are 4.1 million active and 2.4 affiliated retirement of participants.
Funds with a funding shortfall propose a recovery plan annually with information on the measures they will take to improve the situation. In extreme cases, funds have cut their pensions.
The amount of policy coverage from December 31 determines whether the funds next year to reduce their pensions. This has implications for people who are already retired, as participants build retirement yet.
Last week warned four of the five largest pension funds for all possible discounts. ABP (94.4 percent), Pensioenfonds Zorg & amp; Welfare (92.5 percent), Pension Fund for Metalektro (93.7 percent) and Pensioenfonds Metaal & amp; Engineering (94.5 percent) were all late June an insufficient policy coverage
No comments:
Post a Comment