The average coverage ratio of Dutch pension funds increased to 108 per cent in
September following a decrease in August, according to Aon Hewitt.

The policy coverage ratio, which is used to determine pension cuts and
indexation, increased from 103 per cent to 104 per cent.

The funds’ liabilities fell by about two per cent, while the assets remained
almost stable in September. Developed market equities recorded a profit of 2.8 per cent. The emerging markets recorded a small profit of 0.2 per cent. Real estate saw a slight rise in value.

“Compared to last year the funds are doing much better,” says Frank Driessen, chief commercial officer at Aon Hewitt.

He points out that the average coverage ratio is around 10 per cent higher than on 1 October 2016. “But exciting months are ahead of us. Possible adjustments to the ECB interest rate policy and the Brexit negotiations can have an impact on the interest rate markets. Only then will it become clear if the larger funds will also recover sufficiently to avoid pension cuts.”

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