NETHERLANDS – A spokesperson for the Dutch social affairs ministry has flatly denied market rumours that the new Financial Assessment Framework for pension funds had been delayed again.

There was bond market chatter that the FTK – which has already been delayed once already – was set to be delayed, with traders positioning themselves accordingly. The source of the rumours was not clear.

The FTK, the Financieel Toetsingskader, was delayed to the start of January 2007 by the central bank in September last year – after initial denials. The central bank declined comment today.

Any further delay if it occurred would be welcomed by the industry, observers say.

Fixed income traders are monitoring the situation alongside the pension industry because the FTK will potentially hit pension funds’ asset allocations. The new rules, which include a solvency test and a continuity analysis as well as the introduction of fair current value as a valuation basis of assets and liabilities, also have a broader macroeconomic impact.

Earlier this year, SEI Investments said Dutch pension funds would need to tie up €50bn - 10% of their country’s GDP - to meet the requirements of the FTK.

SEI found that under the FTK sponsoring companies must put aside a €30 for every €100 of assets they need to finance €100 of liabilities.

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