What is clipping (of pensions)?

Pension reductions refer to the (usually temporary) lowering of pension payments or the future accrual of pension rights. This is considered an extreme measure, which may be necessary when a pension fund's funding ratio falls significantly below the minimum required level of 105%, as mandated in the Netherlands.

The supervisor, De Nederlandsche Bank (DNB), can then demand measures to restore the funding ratio within three years. If the proposed measures prove insufficient, the pension reduction can be enforced.