The average funding ratio of Dutch pension funds increased to 112 per cent in May 2014, the highest level since April 2011.

Dutch regulator De Nederlandsche Bank said the funding ratio increased from 111 per cent at the end of March due to pension funds’ positive returns on equities and fixed-rate assets.

Falling capital market rates pushed up the value of pension funds’ fixed-income asset portfolios while equity price developments also had a positive effect on the funding ratio, DNB said.

The interest rate term structure including UFR and averaging declined which resulted in an increase in technical provisions.

The AEX was up 1.0 per cent between the end of March and end of May and the MSCI World-Index was up 2.4 per cent.

Of the 275 pension funds with investments for their own risk, 11 had funding ratios below 105 per cent at the end of May 2014.

In the same period, the pension funds with a funding ratio below 105 per cent represented around 425,000 active members and 200,000 pensioners.

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