NETHERLANDS - The cover ratios of Dutch pension funds have deteriorated considerably over the recent weeks and are now 109% on average, according to Nout Wellink, president of pensions regulator De Nederlandsche Bank.

"The position of the pensions schemes has clearly worsened and is not satisfactory," Wellink pointed out to parliament on Thursday.

That said, the DNB chairman stressed the financial buffers - built up since the previous market crisis in 2001 and 2002 - are proving their worth.

"Compared to other countries, the position of Dutch pension funds is much better [than elsewhere]," Wellink added.

Depending on their specific investment risks, most pension funds have a reserve shortfall when their funding ratio drops below 125%. In this case, the financial assessment framework nFTK requires schemes to submit a 15-year recovery plan.

However, underfunded schemes with a cover ratio of less than 105% must inform the regulator of how they expect to improve their position within three years.

Wellink was not specific about the numbers of pension funds with a shortfall at present.

At the end of the second quarter, the funding ratio of Dutch pension funds was still 136% on average, according to DNB.

The average real funding ratio - the relationship between the market value of the investments and the indexed liabilities - was approximately 100% by then, the regulator estimated.

At the end of June, eight pension funds were underfunded, while 228 schemes had a cover ratio between 105% and 130%, DNB reported. The pension funds' combined assets were €650bn by then.

At the end of the third quarter 2007, the average nominal funding ratio of Dutch pension funds was 156%.