Dutch pension funds hard hit by financial crisis

Special Report:Global Financial Crisis

BRUSSELS, Jan. 29 (Chinese media) -- Pension funds in the Netherlands have been

hard hit by the financial crisis, with the coverage ratios of big pension funds

falling below the government-required target, Dutch media reported on Thursday.

The Dutch Association of Industry-wide Pension Funds said most pension

funds are not expected to keep pace with inflation and wage increases this year.

Some pensions will have to raise premiums and lower pension payments.

The four biggest Dutch pension funds said on Thursday that their buffers

have been eroded by falling stock prices and interest rates and they no longer

meet the obligatory 105-percent coverage ratio. All four funds are freezing

pensions this year.

A ratio of 105 percent would ensure that pensions can meet more than their

pension obligations.

The civil service pension fund ABP, one of the biggest pension fund in the

world, said its coverage ratio had fallen by over a quarter to 90 percent in the

final quarter of last year.

The fund wrote off 22 billion euros (29 billion U.S. dollars) because of

the financial crisis. "This crisis is the most serious ever to hit ABP," said

chairman Elco Brinkman.

Health service pension fund Zorg en Welzijn, which has some 2.1million

clients, lost 16 billion euros in the financial crisis. Its coverage ratio

dropped from 126 percent to 92 percent in the fourth quarter.

Light engineering fund PME said it is to hike premiums by 1 percent.

The Association of Industry-wide Pension Funds on Thursday called on the

Dutch central bank to give pension funds more time to get their investments in

order.