Additionally, pension funds will be allowed to use the average funding of the previous 12 months for major decisions, and they may discount their liabilities against the 'ultimate forward' rate, which is “a stable and realistic assessment for the long-term interest rates”, according to the minister in his long-awaited elaboration of last year's Pensions Agreement. Kamp stressed that the proposed new discount rate was also compliant with Solvency II, the future European framework for insurers.
In the minister's opinion, merging existing nominal pension rights into a new real pensions contract was legally possible, but he said this should be implemented by the social partners and the pension funds boards.
Kamp noted that pension funds may also continue their existing nominal contract, but that they must apply a complete graduated calculation – whereby the level of indexation is based on how close the scheme is to a certain funding ratio – in such cases.
In a preliminary response, the Pensions Federation stressed that Kamp's elaboration of the real pension contract was lacking crucial elements, and that it offered pension funds insufficient clarity to switch from nominal to real arrangements.
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