NETHERLANDS - Extended recovery periods for under-funded pension schemes should be decided on a case by case basis, the Dutch Association of Industry Wide Pension Funds (VB) has argued.
However, VB argued this may not be long enough for schemes with severe funding shortfalls to make up the difference without resorting to draconian measures - and urged the regulator to consider extensions on a case by case basis.
A spokesperson for VB told Global Pensions: "We're saying that seeing the very unusual situation pension funds and the global financial system is in right now, in individual cases the regulator should grant recovery periods of more than three years when the plan is otherwise sound."
He added many funds had dropped plans for the indexation of benefits this year and been forced raise contributions.
"They could lower payments but many funds want to do that unless there are no other solutions," the VB spokesperson added.
The Dutch minister for social affairs has also raised the possibility of raising the pension age from 65 to 67, although this call was rejected by VB.
"We don't want this discussion during the crisis. In the aftermath of this, we could reconsider the total contract of pension funds and maybe retirement age could be an element in that," VB said.
Under Dutch law, when a pension fund's coverage ratio falls below 105%, it is required to submit a recovery plan to the regulator, detailing how it will return to solvency within a three year timescale and 'full' solvency of 125% within 15 years.
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