NETHERLANDS - The €2bn pension fund for physiotherapists (SPF) has decided to grant all its participants a 2% indexation for 2012, despite being under-funded.

The occupational scheme, which offers its participants a relatively low accrual rate, wants to stick to its policy of unconditional indexation, a spokesman said.

Including the inflation compensation, the pension fund's coverage ratio is 96.8%, whereas its recovery plan intended it have 104.1% funding at the end of 2011, he confirmed.

That said, the Stichting Pensioenfonds voor Fysiotherapeuten made clear that it would not be able fulfill its ambition to grant indexation of at least 3%, adding that this target may also be out of reach for 2013.

"Whether we can maintain unconditional indexation depends on the economic developments in 2012," the fund said.

SPF offers a pension accrual of no more than 1% a year for participants in salaried employment and 0.72% for self-employed physiotherapists.

However, participants have the option to pay an additional 11%, 22% or 33% of their regular contribution to increase their pension.

According to the occupational scheme, a growing number of pensioners have opted for higher initial benefits, by taking out advance payments anticipating future pension increases.

The pension fund's coverage ratio has dropped from 116% in June, following falling markets and decreasing long-term interest rates, the criterion for accounting liabilities.

SPF has over 27,000 participants, of whom 17,300 are active and 6,865 are deferred members.

No board member was available for further comment.

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