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Coverage ratio of Pension Fund Imtech 96.40% instead of required 96.75%
Imtech N.V. has approximately 25,000 employees, around 7,300 of whom work in the Netherlands. Three quarters of employees - approximately 5,500 individuals - who work in the Netherlands are insured with the Pension Fund for the Engineering, Mechanical and Electric Contracting Sector (PMT, 'Bedrijfstakpensioenfonds Mentaal en Technische bedrijfstakken'). In addition to the remaining 1,870 active employees, Pension Fund Imtech has 770 deferred members (socalled sleepers), and 1,135 retirees.
DNB was informed on 12 December 2008 of the funding shortfall that had applied at the Pension Fund Imtech since November 2008 as a result of the economic crisis. At the end of December 2008, the coverage ratio was 95.2%. Pursuant to Sections 138 and 140 of the Pensions Act and in accordance with DNB's guidelines, a recovery plan was submitted with the aim of achieving a coverage ratio of 105% by the end of 2013. Pension Fund Imtech was well on its way to meeting the targets of the recovery plan. The coverage ratio was 99.4% on 31 December 2009, and even would have been 103.9% without the extra reservation for long life. Primarily as a result of the currently low long interest rate, however, the coverage ratio dropped to 96.40% as of 30 June 2010. It must be noted in this regard that, for reasons of prudence, Pension Fund Imtech based its recovery plan on conservative return expectations. In addition, the risk profile is relatively low, because the pension obligations are matched for 80% with the investments.
The letter of mr. Piet Hein Donner, (outgoing) Minister of Social Affairs and Employment, of 17 August 2010 states that 18 pension funds submitted a recovery plan that included a 'reduction stipulation'. This stipulation means that if there is insufficient recovery in the financial position of a pension fund, the pension entitlements of all insured parties (members, sleepers and retirees) may be proportionately reduced. In the recovery plan, Pension Fund Imtech's board took in view of a well balanced weighing of interests the position that, in addition to an increase of the contribution and not granting any indexation, all insured parties could be asked to make a sacrifice in the form of reduced pension payments and pension entitlements.
The recovery plan was submitted by Pension Fund Imtech's board with the approval of the pension fund's members' council. All of the fund's stakeholders were already informed of the recovery plan in 2009, including about the possibility of reduction.
Pension Fund Imtech's board is considering short term to assess the new situation and decide on any measures rendered necessary also in consultation with Imtech N.V.. DNB will be informed.
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