Download Recent Pension Developments in the Netherlands

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Transcript
Recent Pension Developments in
the Netherlands
Washington, February 15, 2007
Jos.R. Heuvelman, Director
Division Pension Fund Supervision
De Nederlandsche Bank NV
Key pension elements in the Netherlands
(in 2000)
• 2nd pillar (occupational pensions) very large:
± 125% gdp
• Mostly defined benefit
• Corporate and industry wide pension funds,
separate legal entities
• Liabilities discounted at fixed rate of 4%
Relevant trends/developments
• Financial markets: steady fall interest rates,
stock market bubble
• Dramatic fall in pension coverage ratios
• Aging of population and of pension funds
• Change in accounting rules
Supervisory actions
• Recovery plans requested
• Financial assessment framework (in force
January 2007):
- Market valuation
- Risk based solvency requirement
- Contributions based on costs of new pensions
- Disclosure towards participants
- Short term vs long term
Results (so far)
• Changes in pension contracts
- final to average wage
- indexation conditional (optionality)
• Risk transfer from sponsor to participants, but
collectivety remained
• Funds more aware of interest rate risk
• Increased search for yield: alfa, alternative
investments