The assets of a majority of the Netherlands' large pension funds have fallen well below the legal minimum cover ratio of 105 per cent in recent weeks due to the financial crisis, Dutch media reported on Monday.
According to the Dutch Association of Industry-wide Pension Funds, five of the 10 biggest Dutch pension funds had a coverage ratio of between 85 and 95 per cent at the end of November.
This means they could only meet 85 to 95 per cent of their financial obligations.
The funds are for the national civil service, the health, welfare and transport sectors and the steel industry.
Consequently, they would not raise pay-outs in line with inflation next year, which would have an adverse effect on pensioners' purchasing power, the reports said.
The healthcare sector pension fund PZW, formerly PGGM, said that its coverage ratio had fallen to around 95 per cent.
PZW is the second biggest Dutch pension fund with assets of almost 90 billion euros (70.
3 billion dollars).
The third largest Dutch fund, which covers the engineering sector and manages 30 billion euros, said its coverage ratio was down to 86 per cent.
The civil service pension fund ABP, the biggest fund in the country with assets of 200 billion euros, said it was still above the legal limit of 105 per cent but declined to give specific figures.
The funds are affected by losses on investments and by the rapid decline in interest rates, leading to increases in pension liabilities.
The 10 funds guarantee the pensions of four million Dutch retirees, which are half of all pensioners in the Netherlands.
There are 600 pension funds in the Netherlands.
The Dutch central bank has demanded the funds draw up plans to restore the missing assets before April 1.
However, the Director of the Dutch Association of Industry-wide Pension Funds has said there was no reason for panic.
He said the funds had more than enough money to pay out pensions for the foreseeable future.
(1 euro equals 1.