NETHERLANDS - An 11.5% improvement on ABP's coverage ratio has allowed the board to introduce a 2.82% rise in pensions to be paid out in 2007.
The ratio between assets and liabilities increased from 119.7% in 2005 to 131.2% on 1 November 2006. This will allow the €201bn fund to pay out 2.82% as indexation, that is 77% of contractual wage growth.
In addition to the structural increase in the pensions, the improvement of ABP's financial position will see its members receiving a lump payment of 2.47%.
ABP set the total premium for old-age pensions in 2007 at 19.2%. Employers will pay 13.44% of this while employees will contribute the other 5.76%. This figure was marginally lowered from the 19.4% premium paid in 2006.
The contribution rates for the flexible pensions and retirement part of ABP, that handles early retirement, will be determined later this year.
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HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
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