NETHERLANDS – The €275bn civil service scheme ABP has confirmed it will increase its contribution by 1.3 percentage points to 25.4% of the pensionable salary.

The pension fund cited increasing life expectancy – accounting for almost 50% of the premium increase – and "developments" in its participant population.

Jos van Dijk, spokeswoman for the scheme, said: "An increasing number of participants have opted for later retirement, resulting in higher benefits, but their paid contributions don't compensate for this in full."

ABP added that 0.3 percentage points of the increase was a recovery levy, after the Dutch regulator ruled that premiums must contribute to the improvement of the coverage ratio.

The ABP contribution already includes a "temporary" recovery levy of 3.2 percentage points.

The fund has already declared its inability to grant any compensation for the 0.7% salary increase due to its financial position.

Instead, it is likely to apply a rights cut of 0.5% on 1 April 2013, which will be confirmed on 1 February next year, according to chairman Henk Brouwer.

ABP's coverage ratio was 97% at the end of November, whereas the minimum required funding at the end of 2013 is 105%.

Brouwer added that if ABP were unable to achieve this funding target, it would need to line up an additional rights cut for 2014.

Out of ABP's contribution, 70% is paid by the employer.

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