The funding level of Dutch pension funds has improved very little in the first quarter of 2012, as the good returns were offset by decreased interest rates.

Civil service fund ABP saw its assets rise by €15bn (5.9 per cent) to €261bn, but its funding level only rose by 1 per cent due to liabilities rising by €13bn to €274bn. At the end of March 2012, ABP had a funding level of 95 per cent. Chair Henk Brouwer said that further improvements of the funding level are necessary to prevent possible pension cuts of 0.5 per cent in April 2013.

The funding level of metal fund PME remained stable at 90 per cent, despite returns of 4.2 per cent over the quarter, as the interest rate fell from 2.74 per cent to 2.53 per cent. The fund’s liabilities grew with €4.1bn to €32.7bn, while PME’s total assets grew with €3.8bn to €29.6bn, which includes the extra assets of €2.6bn of the former Stork pension fund, which merged with PME on 1 January 2012. If markets do not improve, the metal fund will cut benefits by 6 per cent in April 2013.

The assets of the other Dutch metal fund PMT grew from €40.8bn at the end of 2011 to €42.6bn at the end of March 2012. However, due to the fall in interest rates, PMT’s funding level also remained unchanged at 88 per cent. Its liabilities have increased by almost 100 per cent since January 2008, from €24.6bn to €48.6bn, while its assets only grew from €34.5bn to €42.6bn. The fund has informed its members in the first quarter of its decision to cut benefits by 7 per cent on 1 April 2013 in case of insufficient recovery.

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