EIOPA appoints new members to stakeholder groups
She added that the chair of the OPSG would be elected during the first meeting of the new stakeholder groups, which will be held on 24 October. EIOPA said its stakeholder groups were an important part of the Frankfurt-based authority’s governance, as they helped analyse and assess the impact of its activities from different angles and perspectives.“They also ensure a close dialogue not only with consumers, employees’ representatives, users of (re)insurance services (for IRSG), beneficiaries of pension schemes (for OPSG) and academics, but also with industry, SMEs and relevant professional associations,” EIOPA said.Gabriel Bernardino, chairman at EIOPA, added: “We are confident that, under the new composition, the stakeholder groups have the right professional expertise to provide feedback on all of EIOPA’s activities.“The diversity of interests represented within the stakeholder groups is crucial for the practical implementation of EIOPA’s mandate – to ensure financial stability and consumer protection in the EU.” The 14 members of the OPSG include the following people:IORP representatives: Lukasz Budzynski, Fritz Janda, Michaela Koller, Niels Kortleve, Matti Leppälä, Joachim Schwind, Martine Van Peer, Benne Van Popta,Petar Vlaić, Allan WhalleyProfessional associations representatives: Charlotta Carlberg, Laure Delahousse,Ruth Goldman, Philip ShierSME representative: Thomas KellerRepresentatives of beneficiaries: Marianne Moscoso-Osterkorn, Ellen Nygren,Guillaume Prache, Marius Serban, Klaus StruweEmployee representatives: Bruno Gabellieri, Hristina Mitreva, Douglas Taylor, Chris Verhaegen, Neil WalshAcademics: Alberto Floreani, Pierpaolo Marano, Manuel Peraita, Ján Šebo, Federica Seganti
The board of supervisors of the European Insurance and Occupational Pensions Authority (EIOPA) has appointed new members to its two stakeholder groups, which will then appoint their respective chairs at the end of this month.The appointment of the new members comes two and a half years after EIOPA first launched its two stakeholders groups, which are split between the Insurance & Reinsurance Group (IRSG) and the Occupational Pensions Stakeholder Group (OPSG).Each group comprises 30 members in total, and 14 new members were appointed to the OPSG group.Speaking with IPE, Chris Verhaegen, previous chair of the OPSG, said she would not run for the new chair position, as, under EIOPA’s stakeholder rules, members cannot hold the position for two consecutive terms.
During a recent Euroforum congress for employers, he noted a growing desire among Dutch employers to limit their contribution from two-thirds at present to 50% of the total premium.The DNB said the drop in employers’ contributions was most noticeable at company pension funds, which usually pay a larger share than companies affiliated with industry-wide schemes.Following a decrease in the tax-friendly pensions accrual for average salary schemes from 2.25% to 2.15% as of 1 January, pension funds have already lowered their accrual from 1.99% to 1.93% on average this year, the regulator said.From 1 January 2015, tax-facilitated accrual is to be reduced to 1.875%.Because pension funds have continued to improve their financial position, they have raised their indexation to 0.4% per active participant on average, and to 2% on average for pensioners and deferred members in 2014, the DNB said.In 2013, only pensioners received inflation compensation, at 0.1% on average, it added.Since 2007, indexation in arrears has been at approximately 9% in total, according to the regulator. Pension contributions in the Netherlands so far this year have fallen for the first time in years due to pension funds’ improved financial position, as well as a drop in the yearly pensions accrual, according to De Nederlandsche Bank (DNB).In a survey of 25 large pension funds – serving 75% of all active participants and pensioners – the regulator found that combined premiums fell from 19.2% to 17.6% of salary.The DNB found said the contribution from employers had fallen in particular, from 12.5% to 11.2% of salary.The watchdog’s finding fit with the observations of Arjan Nollen, director of corporate clients at insurer Nationale Nederlanden.
UK accountants Mazars and one of its partners have been ordered to pay £2m (€2.5m) in fines and costs by the Financial Reporting Council (FRC) after failing in the advice it gave the pension fund of UK drinks company First Quench Retailing in 2007. A disciplinary case against Mazars and its partner Richard Karmel was settled in an agreement with the FRC, which was approved by the council’s tribunal. Mazars and Karmel admitted their conduct had fallen well short of expected standards when advising the First Quench pension fund on a proposed replacement of the fund’s sponsoring employer, the council said. They admitted to allegations in the FRC’s formal complaint that they had failed in their professional competence and due care, objectivity and confidentiality in serving their client. Paul George, the FRC’s executive director of conduct, said: “This outcome sends a clear message to all accountants and accountancy firms carrying out advisory work.” They not only had a responsibility to carry out their work diligently and according to the applicable technical standards, but they also had to consider the different and opposing commercial interests of all those involved, he said.“Accountants must not allow undue influence of others to override their professional judgements and they must have a clear understanding of who their client actually is,” George said.First Quench is a wholly owned subsidiary of UK drinks company Threshers. In July 2007, Threshers’ ownership was transferred, so that three quarters of its share capital was owned by private equity firm Vision Capital, with the remainder held by pensions insurer Pension Corporation.Pension Corporation then proposed that the assets and liabilities of the First Quench pension fund — which was variously valued at £60m to £75m with a deficit estimated at £22m to £28m — were transferred to another fund held by a Pension Corporation company. It was this planned move on which Mazars advised the trustee of the pension fund.In its formal complaint against Karmel and the firm, the FRC said that even though Karmel had been engaged to work for the trustee of the pension fund, he had repeatedly allowed his judgement to be overridden by commercial interests of Pension Corporation.In the settlement, the parties agreed that the misconduct risked the loss of significant sums of money and potentially adversely affected the beneficiaries of the pension fund — but did not cause actual loss.The FRC said the misconduct was significant, but not dishonest or deliberate.Mazars agreed to pay a fine of £750,000 and receive a severe reprimand, as well as £1,120,000 in costs.Karmel was fined £50,000 and was to pay £80,000 in costs as well as receiving a severe reprimand himself.Fines had been reduced from original amounts to reflect admissions made by the firm and Karmel, the FRC said.First Quench Retailing went into administration in 2009.A spokesman for Pension Corporation told IPE: “In August 2013 the FRC announced it was not pursuing any action relating to ’actuaries concerned’ in these historic events.“In May 2013 Pension Insurance Corporation was delighted to have been chosen after an open market competition to insure the First Quench pension scheme in a £160 million transaction, securing member benefits for the long-term as well as providing a benefit uplift.”The transaction was completed after Independent Trustee Services (ITS) agreed to the buy-in deal with PIC, a company under the Pension Corporation umbrella brand.
Insurance group Zurich has begun consulting around 7,200 staff over the closure of its defined benefit (DB) schemes and changes to the defined contribution (DC) offering.The company said it reassessed its offering after rising longevity and falling interest rates increased its funding shortfall, and that it aimed to shift all DB members to a new DC vehicle by July 2015.The latest Purple Book, published by the Pension Protection Fund (PPF), showed the proportion of UK DB schemes closed to future accrual rose from 21% in 2010 to 32% in 2014.Zurich operates two DB schemes, one for its core business that closed to new members in 2007, and one for subsidiary Endsleigh, which closed in 2001. Combined, the schemes have a deficit of £648m (€829m) from around £4.7bn in assets.The company will close the DB schemes to future accrual on 30 June 2015, with all members, including those currently only accruing DC benefits, moving to a new 12% non-contributory DC scheme.Chief executive of Zurich UK Life Gary Shaughnessy said the company was “sensitive” to the impact on staff, and that the proposals were equitable in nature.“We simply cannot ignore the impact on the long-term sustainability of our UK business of the cost of funding an open defined benefit pension scheme,” he said.“This is about looking ahead, recognising that the current arrangements are not sustainable, and acting now to ensure our future arrangements for all our employees are.”In other news, the PPF 7800 Index, which calculates the funding level of more than 6,000 UK corporate schemes, showed the deficit increased by more than £20bn to £165bn over the month of October.Calculating funding on an s179 basis, which calculates schemes’ ability to provide PPF-level benefits, the lifeboat fund said the funding ratio among schemes fell by 1.3 percentage points to 87.9%.Assets within the scheme increased by 1.1% to £1.2bn, but liabilities also rose by 2.5% to £1.36bn.Over 12 months to the end of October, funding ratios have fallen by 7.9 percentage points as liabilities rose by 15.7% and assets increased by 6.2%.The PPF said the main cause for this month’s deficit increase was a 12-basis-point fall in the yield of 15-year UK Gilts, while the FTSE-All Share, a prime index for assets, fell 0.9%.
“When we define our policy we will be looking at internal and external people,” he said. “We are reviewing, in the context of the Pioneer acquisition, the way we will price funds in order to obtain our objective of being efficient for investors. We will continue to be a price leader when we will decide what to do with brokerage research fees.”Perrier continued: “I ask all people to be cautious and reasonable and not to be impressed with some people who say it is good not to charge [research costs] to the fund. Funds that have no research costs [do so] because they don’t practise alpha [generation].”Also speaking in Paris at L’AGEFI Global Invest, Alexander Schindler, executive board member and head of institutional business at Union Asset Management, and a former president of the EFAMA European funds association, said that asset managers were likely to reduce their external research budgets by 30% as a result of the MiFID II requirements. This would have a further effect on investment bank income and sell-side research provision, he said.Dan Waters, CEO of ICI Global, the international offshoot of the US Investment Company Institute, noted that the EU was setting the pace internationally in terms of investment management cost transparency.More managers to absorb research costsBoth State Street Global Advisors (SSGA) and Columbia Threadneedle Investments have declared this week that they will absorb investment research costs.A spokeswoman for SSGA said: “We believe that this approach will result in the best outcome for our clients under the directive [MiFID II]. We will continue to engage with external research providers to ensure we are receiving the highest quality service to support our internal processes. Due to the strength of our internal investment research capabilities we have never been overly reliant on external research. We will continue to use external research only where it is additive to our own capabilities.”In a statement, Columbia Threadneedle said its processes used “in-depth internal research supplemented with specialist research acquired from third party research providers. This enables us to selectively access broader knowledge to generate performance across our strategies.”In addition, Swiss boutique RAM Active Investments has also said it will meet the cost of investment research itself. Thomas de Saint-Seine, CEO, said its systematic funds relied purely on in-house research, while fixed income costs would be met by the company.DC Thomson backs ERIC research toolDC Thomson, one of the largest private media organisations in the UK, is partnering with Electronic Research Interchange (ERIC) to develop the latter’s investment research offering for ”the post-MiFID II world”.The transaction will see DC Thomson acquire a material stake in ERIC, which will create tailored research solutions for investment managers and research providers. The deal will provide the functionality to create advanced search options for a library of content capable of adding more than 200,000 research documents on a daily basis to ERIC’s platform.Russell Napier, co-founder of ERIC, said: “We are excited to partner with DC Thomson to bring both buyers and sellers of investment research world class digital publishing expertise. DC Thomson’s support allows ERIC to retain a vital independence of ownership in a marketplace where transactions need to be highly confidential. This partnership allows ERIC to offer both off the shelf and bespoke solutions across the industry.” Yves Perrier, the CEO of Amundi, today gave a strong hint that his firm could retain its current stance to pass on research costs to clients and funds from next year under MiFID II.Perrier said Amundi was still evaluating its position on research costs and whether or not to charge them to clients in the light of its acquisition of Pioneer. He also said there was a danger the coverage of under-researched parts of the market would be reduced, with knock-on effects for capital transmission and investors.Asset managers must unbundle research costs from other costs when displaying fund charges under MiFID II rules. The majority have so far chosen to pay for research costs from their own balance sheets rather than pass them directly through to fund investors.Speaking today in Paris, Perrier said 60% of Amundi’s total research was undertaken internally and the remaining 40% was external.
Institutional investors should look beyond mid-market corporate direct lending to other parts of the private debt universe, such as US residential mortgages or the UK commercial real estate debt market, according to Willis Towers Watson.Private debt was now a core asset class for institutional investors, but concentrating on mid-market corporate direct lending was “much too constraining” an approach, the consultancy said in a report published last week.Assets under management in private debt grew to a record $667bn (€557bn) at the end of 2017, up 13% on the year before, according to data provider Preqin. This meant the industry had more than tripled in size in the past decade, growing from $204bn as of the end of 2007.Total assets in direct lending increased by $47bn since the end of 2016, the company added. Willis Towers Watson said mid-market direct lending was showing signs of “material deterioration in credit underwriting and future return potential”, and that investors needed to consider looking for better value elsewhere.“At its simplest we are looking to identify borrowers in private debt markets with a genuine and credit-positive need for our clients’ capital,” the consultancy said. “In addition, we are seeking situations where there are greater barriers to entry for providers of debt capital like us.”Other principles investors should bear in mind, according to the consultancy, included making sure the investment warranted sacrificing liquidity.Chris Redmond, global head of credit and diversifying strategies at Willis Towers Watson, said it had become more challenging to find value in the private debt market following “meaningful” capital inflows in recent years.“However, we feel there are compelling opportunities to be found if investors remain selective, with good value for risk taken for those investors willing and able to go the extra mile and unearth interesting opportunities,” he added.Credit ratings agency Moody’s last month reported that its loan covenant quality indicator fell to its worst recorded level in the first quarter of this year. Derek Gluckman, a senior covenant officer at the company, said investor protections were “distressingly weak on average”, meaning that collateral might not be available in a bankruptcy scenario.‘Not the reincarnation of the sub-prime mortgage market’In a paper setting out such key principles, the consultancy highlighted the US residential mortgage market and the UK commercial real estate market as examples of where investors could “find value in surprising places”.In the US, the non-qualified mortgage segment was particularly interesting, according to the consultancy.There was a risk associated with this sector, it said, but this did not “represent the reincarnation of the 2006-08 subprime mortgage market”.“Rather,” it said, “non-qualifying mortgages may present an opportunity for a highly discerning buyer to potentially achieve attractive risk-adjusted returns, with positive tailwinds for the US mortgage market and regulatory-linked barriers to entry.”In the UK, meanwhile, regulation had helped to create “a highly attractive opportunity to provide short-term lending against non-income producing commercial real estate at a meaningful yield premium”.“While we are cognisant of the potential for market dislocation in London commercial real estate, the short maturity (less than 12 months) of these loans, the reasonable loan-to-value ratio and being the senior lender (first mortgage) on the underlying property all help limit the risk associated with a market correction,” said Willis Towers Watson.According to Preqin, 51% of investors surveyed at the end of 2017 had a positive perception of the private debt industry, down from 60% in 2016.Reduction in commercial property lending by banks in the UK Source: Willis Towers Watson
A leading smart beta index provider has opted not to add China A-shares to its benchmarks, despite recent high profile moves by MSCI and FTSE Russell.ERI Scientific Beta cited restrictions to the use of derivatives, limited capacity for rebalancing and the high number of stock-trading suspensions as reasons why it had decided against adding access to the burgeoning onshore market for Chinese equity.Instead, the provider said it had created a “dedicated and independent” group of 100 constituents representative of the Chinese equity market to use in its indices.Noël Amenc, CEO of Scientific Beta, said: “An investment universe that is dedicated to smart beta needs not only to be representative, but also investable and liquid. The exposure to China in an index can be controlled by creating a China block – not necessarily through an inordinate increase in the number of Chinese stocks, to the detriment of their liquidity.” The provider highlighted that derivatives products linked to A-shares needed to be “pre-approved” by Chinese regulators, and could often be restricted by local stock exchanges.Even after the China Securities Regulatory Commission quadrupled the daily quota for trades between Hong Kong and the Shanghai and Shenzhen exchanges in April, Scientific Beta said there would still be a risk of breaching the limit when rebalancing indices.As well as introducing the “block” of representative China stocks, ERI Scientific Beta has added American Depositary Receipts (ADRs) to its universe of eligible assets. ADRs are US-listed assets representing shares in non-US companies.These changes, the company said, “provide exposure to China while ensuring a good level of liquidity”.Last month MSCI proposed to quadruple the weighting of China A-shares in its flagship MSCI Emerging Markets index to 3.4% by 2020. The weighting is currently 0.71%.FTSE Russell is also set to phase in A-shares to its indices from next year.
Credit: Steve BuissinneNorway’s sovereign fund pulls plug on ESG managers to cut costs Norway’s giant sovereign wealth fund terminated asset managers running NOK20bn of green investment mandates in 2018, bringing the investments in house to save costs.Norwegian SWF ‘slow to act’ on climate-related exclusions The head of Norway’s Council on Ethics says the Government Pension Fund Global has so far not acted on any of its climate-related recommendations.Norway to cut €6.7bn of ‘upstream’ oil and gas companies from SWF Norway’s Finance Ministry has decided against culling virtually all oil and gas stocks from the GPFG. Instead, it proposed the divestment of NOK66bn worth of exploration and production oil and gas companies. Norway’s finance ministry has moved to end confusion around how companies should be excluded from the country’s giant sovereign wealth fund.The ministry has clarified its rules in an attempt to allow the climate criterion of the Government Pension Fund Global’s (GPFG) ethical investment guidelines to be implemented fully for the first time since their introduction three years ago.At the same time, changes are being made to the way coal companies are assessed for inclusion in or exclusion from the NOK9trn (€935bn) fund, which hold’s Norway’s petroleum wealth.Last month, Johan Andresen, the head of Norway’s Council on Ethics – the advisory body for the sovereign fund – said the GPFG had not acted on any of the five climate-related recommendations the council had made since the criterion was introduced in 2016. Andresen said the implementation of this criterion had proved difficult, with many of its underpinnings already having changed since it was brought in.The government set out detailed points aimed at answering the queries the fund’s manager Norges Bank Investment Management had raised in relation to the council’s advice.“Norges Bank has requested clarification from the ministry of finance of certain aspects of the conduct-based climate criterion,” the ministry stated. “In the report, the ministry notes that the evaluation of companies under this criterion should be based on an overall assessment of relevant considerations, including, inter alia, emissions and emission intensity, forward-looking plans and frameworks on climate.”The council’s coal-related exclusion criterion was being amended to capture companies with considerable coal-related operations in absolute terms, as well as percentage terms.The ministry said the relative 30% thresholds under the criterion were not being changed, but were to be supplemented by absolute thresholds for coal mining and coal power capacity.“The ministry is proposing to put the thresholds at 20m tonnes for coal mining and 10,000MW for coal power capacity,” it said.Further reading
Peter Borgdorff, PFZWPFZW’s funding level fell to 100.9% despite its strong return. Peter Borgdorff, its director, said the threat of cuts had never been greater. The healthcare scheme’s funding level must reach at least 104.3% by the end of next year in order to avoid rights cuts in 2021.Interest rates had never been lower in PFZW’s 50-year history, Borgdorff said, meaning the Netherlands’ current pension arrangements and regulation were no longer effective.Eric Uijen, executive chair of PME, said that he could not satisfactorily explain any cuts to his members if implemented in 2020.“We are on the eve of a new pensions agreement… we are achieving good returns and we have more assets than ever,” he said. The €61bn sector scheme for the building sector (BpfBouw) generated 8.1%, while the metal pension funds PMT (€77bn) and PME (€50bn) delivered 7.5% and 7.8%, respectively.Dutch pension funds post strong Q1 returnsChart MakerEquity markets add double-digit returnsABP chiefly attributed its 14.2% profit from equity investments to the prospect of a trade deal between the US and China, as well as the fact that both the ECB and the US Federal Reserve had refrained from raising interest rates so far this year.Developed market equity investments gained 14.3%, while emerging markets added 13.9%.BpfBouw reported a 13.9% gain on its entire equity holdings, while PFZW returned 11.5%. The five largest Dutch pension funds reported returns of up to 8.5% during the first three months of this year.They credited strong equity markets for their “above average” results, as well as rising government bond prices.The pension funds posted positive results across almost their entire investment portfolios, in stark contrast to the weak returns reported for 2018.Civil service scheme ABP and healthcare pension fund PFZW posted quarterly results of 8.2% and 8.5%, respectively, and saw their assets increase to €431bn and €217bn, respectively. “I cannot explain to our participants and pensioners if we have to reduce pensions in 2020, while… we are achieving good returns and have more assets than ever”Eric Uijen, PMEPrivate equity delivered quarterly profits of 3% for ABP and 1.5% for PFZW. Infrastructure holdings at both schemes added 2.9% and 0.1%, respectively.ABP said its hedge fund allocation gained 1.6%, while PFZW indicated that its mortgages portfolio had produced a 1.3% profit.Fixed income and real assetsFalling interest rates meant schemes’ fixed income allocations also generated above-average results.ABP posted an overall gain of 3.9%, with long-duration government bonds and emerging market debt delivering 5.4% and 6.6%, respectively.PFZW reported returns of 1.7%, including a 3.3% gain from government bonds. However, inflation-linked bonds lost 19.4%.Schemes’ quarterly profits on property ranged from 0.8% (PME) to 10.4% (ABP).BpfBouw’s property portfolio gained 4.8%, with Dutch offices and North American real estate particularly strong.Commodities was the best performing asset class for PFZW and ABP, delivering profits of 24.2% and 15.8%, respectively.ABP lost 0.1% on its combined hedge of interest rate, currency and inflation risks.BpfBouw lost 0.6% on its currency hedge as a consequence of the euro appreciating relative to the US dollar, but it gained 1.9% from its interest rate hedge. PFZW said it made a 2.4% profit on its combined interest rate and currency cover.Schemes gloomier about looming rights cutsDespite the healthy quarterly returns, four of the five largest pension funds warned that the likelihood of future cuts to pension rights and benefits had increased.ABP, PFZW, PMT and PME said their relevant funding levels had dropped by up to 1.4%, falling several percentage points short of the required minimum of 104.3%. Metal industry schemes PME and PMT face benefit cuts at the end of this yearHowever, PME, which serves the metal and electro-technical engineering sector, closed the first quarter with a coverage ratio of 100.6%. This has to improve to 104.3% by the end of 2019, as does the funding level of its sister metal and engineering sector scheme PMT, which recorded a 101.7% coverage ratio at the end of March.PMT said implementing pension cuts despite a coverage ratio of more than 100% was a “bad idea”. It demanded at least a temporary solution to avoid benefit reductions.Corien Wortmann-Kool, chair of ABP, highlighted that the chance of a reduction of pension payments in 2021 was still real. ABP’s funding stood at 102.4% at the end of March.BpfBouw, the sector scheme for the building industry, is the only one of the Netherlands’ top five schemes without concerns about benefit cuts: despite a 0.8% funding drop, its coverage ratio stood at 117.5% at the end of the first quarter.
However, the policy funding is expected to decline further in the coming months as higher figures from the second half of 2018 gradually disappear from the 12-month average.Aon said that interest rates dropped by 33 basis points last month. It attributed the decline to the trade conflict between the US and China as well as the “quantitative easing policy of increasingly competing central banks”.Mercer added that the 30-year swap rate had fallen by 43bps to 0.1%, down from 1.39% at the start of the year.As a consequence of the collapse in interest rates, pension funds’ liabilities rose by more than 8% on average, according to Aon.The current ultimate forward rate (UFR) of 2.2%, which Dutch pension funds are allowed to apply for calculating liabilities, cushioned the effect of interest rates, Aon said.The consultancy noted that the declining interest rates had boosted the value of government bonds and interest rate swaps. Data compiled by hedge fund consultancy Agecroft showed that Dutch government bonds had negative yields across the curve out to 30 years.Government bond yield curvesChart MakerEquity markets fell during August – by 1% for developed economies and 4% for emerging markets – but pension funds’ investment portfolios gained 4% on balance during the month, Aon said.Pension schemes that have been underfunded for a consecutive period of five years must cut payments and pension rights next year if their coverage ratios are still short of 100% at December-end.The Dutch government recently decided to temporarily lower the minimum required funding level from 104.3% to 100%, pending the implementation of the pensions agreement signed in June.However, the effect of the measure – which was introduced in an effort to avoid cuts – was largely undone by falling interest rates in the meantime.In addition, the government has also agreed to lower allowed assumptions for future returns as of 1 January, which is expected to negatively affect pension funds’ recovery prospects.Large schemes most affected Cuts to pension rights and benefits have become a realistic scenario for many Dutch pension schemes as their financial position continued to deteriorate last month.Coverage ratios fell from 102% to 98% on average in August, according to Aon Hewitt, as interest rates dropped.Mercer, which used slightly different assumptions, estimated that last month closed with an average funding ratio of 96%.The crucial “policy funding” – the average coverage ratio over the past 12 months, and the main criterion for cuts and inflation compensation – fell to 105%, according to Aon, and to approximately 104%, according to Mercer. Metal industry schemes PME and PMT are likely to have been underfunded for six consecutive years by the end of 2019For the short term, both metal schemes PMT and PME are especially at risk of cuts, as they are likely to have been underfunded for six consecutive years in 2020.At July-end, PMT, the €77bn sector scheme for metalworking and mechanical engineering, reported a funding ratio of 96%.If this were to drop by 5%, the pension fund would have to cut benefits and pension rights by 9% in order to restore its funding to 100%.One month ago, the coverage ratio of the €50bn PME, the industry-wide scheme for metal and electro-technical engineering, stood at 95.7%.The funding level of the €431bn civil service scheme ABP was 93.9% at the end of July, while the €217bn healthcare pension fund PFZW was 94.8% funded.However, both pension funds have one year of additional breathing space relative to the metal schemes, as their underfunded position started one year later.The precarious positions of four of the largest Dutch pension funds could affect almost 8m pension entitlements.On Thursday, the Dutch parliament will debate the financial position of pension funds and looming discounts.