The average Dutch funding ratio fell slightly to 131 per cent in June, down from 133 per cent in May, according to Aon Netherlands' Pension Thermometer.

Aon said the two-percentage point decline was primarily driven by lower interest rates.

However, the policy funding ratio, based on the average funding of Dutch pension funds over 12 months, increased to 128 per cent, up from 127 per cent.

Aon said political and geopolitical developments created mixed conditions across financial markets during June.

Despite global equities rising by 0.6 per cent in June, Aon Netherlands noted that regional differences were significant.

For example, US equities fell 0.9 per cent in local currency terms but gained 1.2 per cent in euro terms thanks to a US dollar appreciation of more than 2 per cent.

Meanwhile, European equities increased by 4.6 per cent, while Dutch equities surged 14 per cent. Emerging market equities also gained 0.6 per cent, although Chinese equities and markets in oil-exporting countries weakened.

Falling eurozone interest rates boosted fixed income portfolios by around 1.3 per cent, resulting in a total portfolio return of 1.2 per cent for the month.

Regarding interest rates, the risk-free interest rates across the first 30 years of the yield curve fell by an average of six basis points in June.

The Ultimate Forward Rate (UFR), used by pension funds to value long-term liabilities, stood at 2.1 per cent. The fall in interest rates increased the value of pension liabilities by approximately 1.3 per cent.

Combined with modest asset growth, this reduced the average funding ratio to 131 per cent.

Furthermore, Aon’s analysis revealed the new defined contribution (DC) pension schemes achieved an average return of between 0.9 per cent and 1 per cent across all age groups in June, with relatively small differences between younger and older participants.

However, returns over the first half of 2026 varied more substantially, ranging from 12.5 per cent for younger members to 4.4 per cent for those approaching retirement.

For participants close to retirement who intend to purchase a fixed annuity, portfolio values increased by an average of 4.4 per cent during the first half of the year, while the cost of purchasing a pension rose by only 1.1 per cent, leaving this group with a modest net gain.

Overall, Aon concluded that the first half of 2026 delivered strong returns for DC pension arrangements.

However, Aon said recent parliamentary concerns about disappointing pension fund returns highlight the importance of communicating investment performance in context.

"The issue is not only returns, but also interest rates," Aon Netherlands director of wealth, Frank Driessen, said.

"Although the new pension system was presented as being easier to explain, you cannot avoid looking at both sides of the balance sheet."

Driessen said higher interest rates over the past year had reduced the cost of providing pension benefits.

Under the new solidarity contract, this is reflected through the protection return, which may be negative but helps preserve benefit levels. Excess investment returns can then be allocated to pension capital, ultimately supporting higher benefits.

"This example underlines that communication and the message are crucial," Driessen added.

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