The Netherlands Central Bank has warned pension funds to invest their money more carefully. Quoting its own research, the bank says Dutch pension funds were over-optimistic at the outset of the current financial crisis and made errors when calculating their assets.

The returns which the funds receive on their multi-billion investments pay for the pensions of millions of retired workers. The funds' investments are financed by the monthly premium payments made by people who are currently in employment.

In its review, the Netherlands Central Bank says pension funds which had been doing well before the crisis got into trouble nonetheless. The bank finds that their expectations were too high, which increased the likelihood of disappointing results. Overestimation of asset values created an incorrect impression of the true financial position of some funds, according to the bank, which acts as the nation's financial stability watchdog.

© Radio Netherlands Worldwide