NETHERLANDS - Pension fund manager Pensioenfonds Zorg en Welzijn (PFZW) has halved its planned pension increase in 2010 and increased contributions for the coming year.
Managing director Peter Borgdorff said despite its 105% funded ratio, increased life expectancy has taken a toll on the long-term strength of the pension fund. The new indexation amount is 0.72% for 2010, while the contribution rate increased by 0.6 percentage points to 23.1%, he said.
Borgdorff said the indexation and contribution levels are reviewed every year but that the growing life expectancy of its members "raises additional questions".
He said there is no formal limit on how high the firm can up contributions, but staff does have "a moral limit on how high we can raise the contributions," and plan to review payment hikes throughout this year.
In 2009, life expectancy for the female members of PFZW increased 0.9 years, while that of men increased 0.6 years.
PFZW is not the only pension provider that has had to adjust cost of living adjustments because of increased life expectancy. In October, Danish pension fund ATP said it would freeze pensions at their 2009 levels partly because of increased life expectancy, and partly because of a higher number of pensioners receiving benefits. (Global Pensions; October 29, 2009)
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