Average Dutch pension funding ratio rises to 108% - Aon Netherlands

The average Dutch pension funding ratio increased to 108 per cent at the end of March, up from 104 per cent in February, according to the latest data from Aon Netherlands.

Its latest pension thermometer data found that a combination of rising interest rates and share prices led to falling liabilities and increased assets. In addition, with an increased funding ratio in February and March, the coverage ratio is also on the rise, standing at 97 per cent at the end of March. This figure is the average funding ratio over a 12-month period.

Currently, the statutory minimum coverage ratio is 90 per cent. Aon believes that due to the increase in the funding ratio over the past two months most pension funds are now out of the “danger zone”.

During March, interest rates rose slightly due to a global expectation of rising inflation figures. On balance, risk-free interest rates for the first 40 years increased by an average of 8 basis points in a month.

However, the Ultimate Forward Rate (UFR), which allows pension funds to calculate the value of their future liabilities, fell due to the phased transition to the new system. The increase in interest rates caused the value of the liabilities to decrease by almost 2 per cent.

In terms of the financial markets, global shares rose by around 4.8 per cent, with developed market stocks rising by 5.4 per cent and emerging markets rose by around 1.7 per cent.

    Share Story:

Recent Stories


Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Podcast - The power of three: Using Common Contractual Funds to improve tax outcomes for investors
Large asset owners are still investing in equities in a way where they are taxed on their income. The implication is that they get a poorer return. They need to, and can, improve this, but how?

In this podcast, AMX Head of Client and Manager Development, Aaron Overy, and AMX Product Tax Specialist, Kevin Duggan, discuss with European Pensions Editor, Natalie Tuck, about three options to help ensure good withholding tax outcomes for institutional investors.

Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Advertisement