Pension funds more likely to cut benefits when funding ratio low.
The study looked at how underfunded Dutch pension funds choose between raising contributions, not increasing pensions, or cutting pensions. They found that pension cuts are more likely when the funding is very low, there is little time for recovery, the fund is not corporate, and participants are young. Funds tend to increase contributions first, then consider not increasing pensions, and only cut pensions as a last resort.
