ABP will most likely be cutting pensions in payments and pension promises by 0.5 per cent from 1 April 2013, in order to improve the funding level by the end of 2013, the Dutch civil service pension fund has announced.
The possible pension cuts will depend on the financial position of the fund at the end of this year. The temporary rise in pension premiums of one per cent will rise to three per cent, which is applicable from 1 January 2012 until at least the end of 2013.
ABP chair Henk Brouwer said: “We will have to announce unpleasant steps today. Unfortunately we will also have to turn to our last resort, cutting pensions. I understand that members and employers will be disappointed.”
He added that the fund had a funding level of 94 per cent at the end of 2011, and that the 0.5 per cent cut will be an income reduction of €3.50 a month for current pensioners.
The cuts are still subject to regulatory approval by De Nederlandsche Bank in May.
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