The funding ratios of pension funds fell from 95 to 85 percent in the first half of March, financial service provider Aon said on Wednesday.
Funds are seeing funding levels drop sharply due to the turmoil in the financial markets.
Investors fear the impact of the corona virus on the global economy and stock markets have collapsed in recent weeks. This also reduced the value of pension funds' assets.
At the same time, the actuarial interest rate fell due to investors 'fleeing' in government bonds. As a result, funds must have more assets to meet their future obligations.
The pension funds previously reported that the funding ratios had fallen sharply at the end of February. Civil servants fund ABP saw the funding ratio fall by no less than 5.4 percentage points to 88.7 percent. PMT, Pensioenfonds Zorg & Welzijn and PME saw the funding levels drop to 92.3 percent, 90.4 percent and 92.3 percent, respectively.
If this crisis continues, millions of Dutch people will face discounts, says Aon. "The pressure on politics will increase in the last quarter of this year to avoid rebates and to keep the peace in retirement country," said Frank Driessen, Chief Executive Officer of Aon Retirement & Investment.
"The contract without actuarial interest rate may act as a way out in these difficult economic times. These remain very uncertain times and the question is how hard the corona crisis will hit global economies even further."
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The coronavirus in short
- The coronavirus mainly spreads from person to person via sneezing and cough drops. The chance of becoming infected through surfaces such as door handles is small. This chance decreases if you wash your hands often.
- You can considerably reduce the chance of spreading by keeping at least 1.5 meters away from others.
- An infected person infects two to three others on average. Precautions are necessary to contain this.
- The vast majority of patients have mild (flu-like) complaints.
- Almost all deaths involve the elderly or other vulnerable persons, such as heart, lung or diabetes patients. If everyone complies with the measures, this reduces their risks.
- Read here what precautions you should take.