NETHERLANDS - Dutch pension funds' returns for the second quarter are in excess of 7% and have come back to positive territory for the first time since 2007, data from the Dutch central bank De Nederlandsche Bank (DNB) revealed.
The DNB said the strong returns were generated by the recovery in the stock markets, while changes in interest rates helped bring funding levels up to 103%, from 92% the previous quarter.
The central bank also said it had assessed over 340 recovery plans submitted by pension funds, whose funding level had plunged below the state mandated 105% level.
According to Dutch law, funding levels below that threshold trigger an obligation for the fund to submit a recovery plan to the DNB.
Following this review, "only a few" pension funds received a negative decision by the DNB and must resubmit another recovery plan.
DNB is still in talks with approximately 50 pension funds in order to reach a decision on the appropriateness of their plans to reach full funding. However, it said it expected many of those funds would eventually receive a favourable opinion.
By following the recovery plans, it will take the funds an average of over three years to achieve the minimum funding ratio of 105%.
The DNB added pension funds should progress in the longer term to a funding ratio "appropriate to the risks incurred by the fund", which is often between 100% and 130%.
This will take them around nine years on average, with a maximum of 15 years permitted.
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