The coverage ratios at the PME, bpfBOUW and Pensioenfonds Zorg en Welzijn (PFZW) pension funds improved considerably in the last quarter of 2019. The pension funds benefit from a higher interest rate and positive returns. In all three cases, the policy funding ratios were well above the critical 90 percent limit, so that the funds do not have to switch to pension discounts.
PFZW recorded a coverage ratio of 99.2 percent at the end of December, compared to a coverage ratio of 92.2 percent at the end of the third quarter in September.
The policy funding ratio, the average funding ratio over the last twelve months, fell to 96.5 percent. This means that the pension fund is still well above the critical 90 percent limit. If a pension fund is included, they must proceed to the reduction of pensions.
The coverage ratios of metal fund PMT and building fund bpfBOUW also increased in the last quarter to 98.8 and 114.1 percent respectively. Discounts are also not lurking with these pension funds, with policy funding ratios of 97.6 and 112.4 percent. The construction fund even indicated in December that it would once again raise pensions in 2020.
In November Social Affairs minister Wouter Koolmees temporarily lowered the critical lower limit for pension discounts to 90 percent. The measures were necessary because many pension funds ran into problems due to a persistent low interest rate. As a result of the lowering of the critical limit, many pension funds are temporarily out of trouble, but that does not yet apply to the 600,000 participants at four smaller funds.
In addition, the lowering of the critical lower limit gives employers and trade unions the time and space to work out the Pension Agreement concluded in June. “Peace and stability are needed to do that well in the coming period,” said Koolmees at the time.
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