NETHERLANDS - Pension funds need to communicate more actively to all stakeholders to reassure them about the funds' solidity in the current market turmoil, according to Aon Consulting's Dutch executive director of actuarial services.

Rajish Sagoenie told pension fund managers at a seminar organised by Aon earlier this week a further lack of communication will result in unnecessarily worried stakeholders.

Pension funds' likely failure to index pensions this year, combined with high inflation, is causing a reduction in the purchasing power created.

According to Sagoenie, this development needs to be communicated clearly to employers and employees, who may still be unaware of the effect of the current market turmoil on pensions, so they can take measures.

He also warned pension funds should be extra cautious by looking more closely at their investment policy, evaluate how immune it is to stress, determine which real risks the fund is exposed to, while also examining the size of assets to be recouped.

"Pension funds need to start a dialogue on investment commissions, investment managers and investment consultants, and, if necessary, take measures without losing sight of the long-term," he said.

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