It's hard to explain. Dutch pension funds had last year 1,176 billion in assets. And yet pensions are not completed and is likely to have to cut some funds next year. It has to do with the impact of declining interest on the coverage, which the NRC article eight questions to be put to a variety of professionals in the pension world.
What is the discount rate and where does it come from?
The value of the pension in the future is determined by the discount rate. There used to be a fixed interest rate of 4 percent, since 2007 it is based on the risk-free market interest. If funds have to pay someone 10 years from retirement, they reckon with the market interest rate for a period of 10 years a payment in 20 years with 20-year rates. But who at the beginning of his career going to build retirement may get only about 55 years of retirement. Because interest rates are unreliable for more than 20 years, De Nederlandsche Bank (DNB) has 2012 introduced the UFR. The regulator has already reduced the discount rate at 2015 and the UFR is now mobile and decreases further.
Low interest rates and affect pension
The pensions have become more expensive, said Onno Steenbeek.The idea of evaporation is nonsense. The obligations have risen faster than the ability because we have calculated that we live longer. Playing ... across the sector
Eight questions about retirement
The eight questions that are answered in the article are:
- What determines whether pension funds should be raised or cut & nbsp; What kind of pension interest charge ?
- What kind of pension interest charge?
- What does the low interest rate than pensions?
- How many billions have been vaporized by the low interest rate?
- Pension funds can also earn as interest rates fall?
- Do people with pension insurance also affected by the interest rate?
- What do political parties do low interest rates?
- What happens if interest rates now would continue to rise suddenly?