Credit Crisis Set to Hit Pensions
Hundreds of thousands of pensioners in the Netherlands will feel the effect of the worldwide credit crisis next year as pension funds decide not to increase payouts in line with inflation, Trouw reports on Friday.
Gerard Rieman, of the corporate pension fund association, told the paper a number of funds have already agreed not to put up pensions fully, but most still have to take a decision.
Falling share prices mean many funds may not have enough cash to increase payouts, the paper says. Pension funds have increasingly moved their investments into shares in recent years.
Central bank president Nout Wellink told tv programme Nova on Thursday night that he understood peoples’ fears about economic developments but added that it was not necessary ‘to exaggerate’.
Crisis will be felt
Banks such as Fortis, which has lost 25% of its share price this week, are not in danger like US banks, he said.
But the impact of the crisis would be felt, he said. ‘The Netherlands is an open economy and if the world economy slows down, the Netherlands will be affected.’
Alexander Rinnooy Kaan, chairman of the government’s SER advisory body and a former top ING banker, told the Financieele Dagblad that Dutch financial institutions are in a ‘relatively good’ position.
He said he is optimistic that the unions will agree to wage moderation, seen as an important step to keep inflation under control.
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