Caribbean Netherlands Pension Fund PCN has indexed the pension plans of retirees and active partici­pants by 1.7 per cent as of January 1. This was announced in a press release on Thursday.

“With this, the fund fully compensates participants and retirees for the increased cost of living between Septem­ber 2022 and September 2023,” it was stated in the press release.

Except for when its coverage ratio is too low, PCN adjusts its pension entitlements and rights every year on January 1 based on average price developments in Bonaire, St. Eu­statius and Saba. Coverage ratio is a metric used to mea­sure a company’s ability to pay its financial obligations. PCN said it uses price developments at the end of Sep­tember, which are published by the Dutch Central Bureau of Statistics (CBS).

“Price development varied quite strongly per island in the past year,” said PCN. “Prices rose by 2.8% in Saba and 1.9% in Bonaire. In St. Eustatius, prices fell slightly by 1.1%.”

This is the second time in four months that PCN has in­dexed pensions, as it granted an indexation of 3% on Sep­tember 1, 2023.

“Although the year was somewhat volatile, PCN has great­ly benefited from a sharply rising interest rate and good investment results. This not only allows us to grant full indexation, but it also means the fund ended 2023 with a very healthy coverage ratio of 128.3%,” said PCN Chair­man Harald Linkels.

A coverage ratio of 128% means that for every dollar in obligations, PCN has one dollar and 28 cents in assets. PCN said the newly adjusted pension amounts will be paid out this month (see related story).

The Daily Herald.