Pension funds allowed one year to reinstate their cover

About 300 pension funds, which suffered financially due to the stock market decline, are allowed one year to bring their cover back to the required level. Also, between two to eight years from now they have to take measures safeguarding them against financial risks as regards thier share holdings.

This was published in a leaflet by the Pensioen- & Verzekeringskamer (PVK - Pensions and Insurance Supervisory Authority of the Netherlands) yesterday.

According to the new regulations of the PVK pension funds are considered having insufficient cover when they are financed under 105%. Having a cover of 105% indicates that the fund has 5% additional cover against all its obligations.

The PVK considers this 105% necessary for eventualities. Presently 15 pension funds have a cover of less than 90%, whereas another 300 pension funds have a cover between 90% and 105%. The total Â'undercoverÂ' is estimated at EUR 23 bln.

(source: PVK)

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