NETHERLANDS - The Dutch central bank and pension fund regulator De Nederlandse Bank (DNB) has rejected claims it interfered with pension funds' investment decisions as a result of declining funding ratios reported by Dutch pension schemes.
Earlier this month, Global Pensions reported Dutch consultants had warned while solvency rates of pension funds in the Netherlands declined rapidly in September, supervision by the DNB had drastically increased (www.globalpensions.com: 2/10/08).
By contrast, the DNB said: "Pension funds would do well to refrain from hasty decisions and to take their time to analyse their own current situation."
It added: "If a pension fund has a deficit, it has to present a recovery plan to DNB showing how it intends to restore its financial position to health within the set time limits. DNB will tailor its approach to the specific circumstances of the pension fund concerned."
The DNB said the Netherlands had a robust pension system based on capital funding. The total available pension capital was currently estimated at approximately €600bn (US$813.5bn), as opposed to annual pension payments of circa €20bn (US$27.1bn).
However, research by Mercer - which has been tracking solvency rates of its client pension funds in the last year - showed there had been dramatic falls in solvency rates, from an average of around 130% earlier in the year, to 116% at the beginning of October.
The DNB said under the Pension Act, it supervised the fulfillment of the promise to deliver to every pension scheme member the nominal pension benefit funds had committed to.
It added the Pension Act allowed "sufficient flexibility to do justice to the long term nature of pension liabilities and that flexibility can now be used".
The DNB concluded it was too early to asses the impact of the credit crisis on future indexation commitments or contribution demands by pension funds.
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