What is the coverage
The credit crisis has also left the funds untouched. The ability of many funds is currently insufficient to meet. All obligations The decisive factor in this respect is the funding. The coverage ratio represents the ratio between the assets and future liabilities of a pension fund.
If the ratio is less than 100, then the fund has less cash than it needs to pay out of benefits.
minimum funding
If the coverage of a fund under a safe limit of 105% drops, which actually means that for every euro that one must pay to retire 1.05 euros in the fund, then the fund must report it to De Nederlandsche Bank (DNB).
The pension fund must simultaneously submit a recovery plan to get. Again the minimum coverage of 105% For this they have three years.
How can funds in order as well
Funds in difficulties, to put things in order by increasing premiums or failing to rise with inflation (indexation). Pensions by It is possible that also a combination of both measures.
Moreover, it is good to emphasize that there is no right to exist and indexation indexation is not automatic here. Pension funds annually assess whether the current reserves permit an indexation.
Will my pension at risk
If the funding level of a pension fund gets below 100%, one speaks of underfunding. If the Fund would cease to exist, at that time, not all pensions for the next several years would be complete and may be distributed. At once But that is only a theoretical assumption. Pension funds have always ample time to correct any deficits.
A pension fund can topple
Wezenaar are some differences. Between pension funds and banks If a bank gets into trouble this is a rule by an acute shortage of cash resources. In uncertain times, depositors get their money from the bank and attract investors away their power. As a result, banks can not meet their obligations and go bankrupt.
Pension funds is not at issue. Pensioners can not at the desk to join earlier claim. Their accrued pensions Also has a pension fund investors who do not reclaim their funds. In addition, the funds received monthly premiums than allow them to meet. The current benefit obligations So a pension fund has never been a lack of cash and can not tip over.
What I see as a pensioner of the crisis
A fund which has enough reserves to take measures to purify it again. Some funds have already stated in this connection that no indexation will take place in 2009. For retirees this means that their benefits will not completely rise along with the prices. They will thus deteriorate in 2009 purchasing power. That's bad news, but experience shows that when the weather gets better with the funds, they usually make up for the missed indexation again. The General Civil Pension Fund (ABP) for example uses a coverage ratio of 135% and above to start. Overtaking The purchasing power of pensioners will be restored.
No U.S. states with us
Our collective pension is fortunately much more resistant to a credit crisis in countries like the U.S.. That country has indeed individual plans where one builds own retirement, for example by investing in shares. That pension assets are heavily affected by the protracted fall and one in three Americans expects soon to have to work longer to absorb that blow.
Does offer the collective nature of our pension system less customization, but there are great advantages. Better just abandon indexation and accept a higher premium than American scenes. Incidentally, the site is going to be very comprehensive and clear information, anything that has to do with our pensions retire.