Mortality rates in the Netherlands is slowing due to harsh winters, flu and hot summers, De Telegraaf wrote.
The windfall, calculated by KPMG actuaries, is significant enough to impact the planned 2024 state pension age increase, The Dutch newspaper wrote today, 31 August.
Life expectancy for men born this year is calculated to be half a year lower than previously forecasted and a full year lower for women. The impact is limited for men over 65 today but women of the same age are predicted to lose up to half a year.
A slowing increase in life expectancy is however good news for pension funds who are trying to prevent discounts.
KPMG actuary and partner Egbert Kromme told De Telegraaf: "[Pension funds] have to take into account more than 1 per cent fewer facilities. If a fund has a coverage ratio of 100 to 110 per cent, it will save more than 1 per cent for the coverage ratio."
Metal funds such as Pensioenfonds van de Metalektro (PME) and Pensioenfonds Metaal & Techniek (PMT) are among the funds that would benefit from a windfall as they are below the funding ratio limit of 104.3 per cent and would have to limit funds from 2020, the newspaper wrote.
Last year, the Dutch government decided against raising the state pension age in 2023 to 67 years and six months and if KPMG is right it will not be necessary in 2024 either.
The slowdown comes from the Netherlands having vulnerable elderly people who are sensitive to three things – harsh winters, influenza epidemics and hot summers – which KPMG has taken into account over the past two years.
"If our winters get colder and the summers get hotter, that means more mortality among the elderly. If this continues, the life expectancy will be structurally lower than previously predicted,” Kromme explained.
“Life expectancy does not decrease,” he said. “It does mean that it rises less quickly than previously predicted.”
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