NETHERLANDS - The €8.8bn pension fund for the printing and publishing industry Pensioenfonds Grafische Bedrijven (PGB) has seen its cover ratio drop 25% since the beginning of this year.

The fund, which announced its third quarter results today, said the cover ratio at the end of September stood at 123% - at the end of June the solvency level was still 140%.

In the last nine months, PGB saw its assets decline by around €1.1bn, dropping below its 2005 levels after booking a 10.2% loss on investments in the third quarter.

In a statement released today, PGB said the cover ratio had dropped even further since the beginning of October, which has caused the fund to delay any decision on indexation.

Under normal circumstances, despite the fund's average solvency ratio over the months of July, August and September, the fund would be likely to index the pensions because it averaged 129% over the year.

But industry sources have revealed to IPE full indexation on Dutch pension funds this year is "unlikely".

Under the current regulations, PGB is required to submit a 15-year recovery plan for the pension fund to De Nederlandsche Bank (DNB) if its cover ratio drops below 125%.

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