NETHERLANDS - The €10.3bn railways scheme SPF will grant its participants full indexation of 2.07% from the beginning next year, but the metal workers' scheme PMT has failed to recover enough to consider it.

This latest decision was made after Stichting Spoorwegpensioenfonds' funding ratio recovered to 140% by the end of November - up by 24 percentage points since an absolute low last spring. The scheme's cover ratio was still 189% at the end of 2007.

The industry-wide scheme said it will leave its contribution rate unchanged at 20% of pensionable salary and pay a fraction less indexation than the 2.27% granted last year.

A spokesman noted the scheme has compensated its participants fully for price inflation since the financial crisis began, but has fallen short of compensating based on the salary index by 1.34%.

The decision was possible after SPF returned 8.6% on investments during the third quarter of this year. After currency hedging, equities returned 15.3%, and fixed income delivered a 6.6% return.

Elsewhere, the €31.7bn metal scheme PMT announced it will refrain from paying indexation, as its recovery plan has yet to hit the required minimum cover ratio of 105%, though it has at least recovered to 97%.

By the end of the third quarter this year, its cover ratio rose by 5 percentage points, following a 9% return on investments.

Officials also stated the fund will raise the contribution level required from 25.2% to 28.6% of pensionable salary.

And SPW, the €4.8bn pension fund for housing corporations, said it will also withhold payment of indexation although it will keep its contribution unchanged at 31% of pensionable salary.

The scheme yesterday announced its cover ratio rose by 6.5 percentage points to 103.4% by the end of the third quarter.

The railways pension fund has 30,250 active participants, 24,865 pensioners and 16,920 deferred members. And PMT has over one million members and 33,000 affiliated companies.

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