Largest pension fund in the Netherlands sees funding ratio increase in January | NOW

Civil servants fund ABP saw its financial position improve in January compared to a month earlier, the pension fund announced on Monday. The coverage ratio of the largest pension fund was 93.8 percent at the end of last month, while it was 93.2 percent at the beginning of the month. Other large pension funds, including PFZW, saw their funding ratios decline.

For example, the fund for healthcare workers saw its coverage ratio drop by 0.4 percentage points to 92.2 percent. Metal funds PME and PMT also declined last month. PMT even fell from 2 percentage points to 94.2 percent. The decrease was the result of, among other things, disappointing results on investments.

The funding ratio is the ratio between the money that a pension fund has in cash and the expenditure on pension obligations. This indicator is used to determine whether a fund should reduce pension benefits. This is the case if the funding ratio drops below 90 percent at the end of a calendar year.

Last year things threatened to go in the wrong direction for some large funds. Ultimately, by the end of 2020, the large funds managed to exceed that critical limit, so that cuts in pension benefits have been canceled for the time being. It will be reviewed again at the end of this year.

The fifth large pension fund, bpfBOUW, has not yet published its funding ratio at the end of January. The building fund was much better at the end of last year than the other four large funds. It therefore seems unlikely that the funding ratio fell below the critical limit of 90 percent in January.


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