Home > Legal articles > Pension funds with >90% cover ratio do not have to cut pensions
The Dutch government has announced that it will use its exemption powers to extend the deadlines by which pension funds must meet their mandatory and requisite own capital requirements (known in the Netherlands as VEV and MVEV).
In deviation from current rules, pension funds which fail to meet the MVEV funding ratio of 104.3% for the sixth time in a row by the end of 2019 will not have to apply any cuts. The government is granting these funds an additional year to increase their funding ratio to the required 104.3% level. If they have shown insufficient recovery by the end of 2020, the exemption will no longer apply and they will, as a general rule, have to apply cuts in accordance with the current rules.
The government is also extending the deadline for VEV recovery from 10 to 12 years. But this is only an extension; if social partners, pension funds and the government make insufficient progress in implementing the Pension Deal, larger cuts will be needed next year. That is, unless the financial markets show a strong recovery in 2020 or interest rates on the capital markets increase.
15 December 2020
Pension funds must prepare now and be ready to apply SFDR in early 2021
9 November 2020
Female workers to be compensated when maternity leave and paid holiday overlap
23 October 2020
Privilege of foreign in-house counsel: English court sets standard, Dutch to follow?
15 October 2020
NOW-3: Dutch government continues support for employers, but on less generous terms
16 September 2020
Cumulative ground for termination – does it ease rules on dismissal?
16 September 2020
15 July 2020
New legal entity for social entrepreneurs to be introduced in the Netherlands
14 July 2020
Details of Dutch Pension Deal published: now is the time to start preparing
10 July 2020
Dutch Supreme Court: credit claims can be assigned and securitisation vehicle has duty of care
7 July 2020
Helping employers through the coronavirus crisis: the NOW framework at second glance
De Brauw Blackstone Westbroek
Claude Debussylaan 80
1082 MD Amsterdam
The Netherlands
P.O. Box 75084
1070 AB Amsterdam
The Netherlands