Dutch pension fund ABP saw its funding ratio improve in the third quarter of 2026, despite a negative return on investments, its latest update has shown.

While its funding ratio increased from 126.9 per cent to 132.2 per cent over the quarter, the pension fund's return was -4.3 per cent.

The negative return was driven by its bond investment performance, with bonds returning -10.2 per cent in Q3.

Real estate returned -1.2 per cent, with these negative results partly offset by equities returning 0.9 per cent and alternatives returning 2.2 per cent.

The negative overall return was due to increased interest rates and market volatility.

“The third quarter was once again turbulent on the financial markets,” commented ABP board chair, Harmen van Wijnen.

“The war in the Middle East flared up and interest rates rose sharply due to the ever-increasing government debt in the United States and France, among others.

“The rising interest rates resulted in a negative investment return of -4.3 per cent, causing assets to decline.

“However, due to the rising interest rates, pension liabilities - the pensions we have to pay out now and in the future - decreased relatively more sharply.

“As a result, the increase in the funding ratio continued in the third quarter and reached 132.2 per cent at the end of September."

ABP is set to switch to the new pension system on 1 January 2027, and van Wijnen said the strong funding ratio was a good starting position for the transition.

“We still have a few months until that moment and we are well on track,” he added.

“We will continue to monitor developments for a careful transition.”

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