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Saturday 23 June 2018

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Coverage ratio of Dutch funds increases to 104%

Written by Ilonka Oudenampsen
13/03/17

The average coverage ratio of Dutch pension funds increased from 103 per cent to 104 per cent in February, according to Aon Hewitt’s Pension Thermometer.

The policy coverage ratio, which is used to decide on pension cuts and indexation, rose with 1 per cent to 99 per cent. A coverage ratio lower than around 104.3 per cent means there is a coverage deficit.

The value of the liabilities rose with almost 3 per cent last month, partly due to the unrest around the buying programme of the European Central Bank and the political unrest in France. Overall, the assets of pension funds increased by more than 3 per cent.

Statistics from The Pension Rating Agency (TPRA) show that the pension funds had an average coverage ratio of 106.3 per cent at the end of 2016, 0.5 per cent lower than the previous year. The five biggest pension funds booked the best results in the fourth quarter of last year. They saw their coverage ratio increase with more than 5 per cent, which means pension cuts are off the table for the time being.

Pension fund Zorg & Welzijn performed best, with a 7.1 per cent increase to 96.3 per cent. The fund for the health sector is therefore no longer bottom of the list among the big five. This position is now for Metalektro, which had a coverage ratio of 96.2 per cent at the end of 2016.



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