PME will increase pensions for the first time in fourteen years next month. This is a small increase of 1.29 percent for about 167,000 people who have worked in the metal and electrical sector. The pension fund announced this on Wednesday.
PME can do this through new rules. Funds have recently been allowed to increase pensions if they have a policy funding ratio of 105 percent. Until recently, that was 110 percent.
The policy funding ratio says something about how good a fund’s financial situation has been over the past twelve months and PME is above the critical limit. That means they have enough cash in hand to implement an increase.
Other major funds are expected to follow PME’s lead. The civil servants fund ABP, the largest fund in the Netherlands, has previously said “it wants nothing more” than to increase pensions. More information about this will probably become available later this month.
The announced increase in PME is in stark contrast to the current inflation. For example, prices of goods and services were 8.8 percent higher last month than a year earlier.