The average funding ratio of Dutch pension funds increased to 134 per cent in July, up from 131 per cent in June, as higher interest rates reduced the value of pension liabilities, according to Aon Netherlands.

Its Pensions Thermometer also showed that the indicative policy funding ratio, based on the average funding ratio over the previous 12 months, increased, rising from 128 per cent to 129 per cent during the month.

During July, the risk-free interest rate across the first 30 years of the yield curve increased by an average of 29 basis points. The Ultimate Forward Rate (UFR), which pension funds use to value future liabilities, stood at 2.1 per cent.

Aon said the rise in interest rates reduced the value of pension fund liabilities by more than 4 per cent, offsetting a decline in pension fund assets during July.

Meanwhile, global equity markets fell 0.6 per cent over the month, while the overall pension fund portfolio returned -1.8 per cent, reflecting weaker performance in both equity and fixed income markets.

For defined contribution (DC) pension schemes, monthly returns ranged from -0.4 per cent to -2.2 per cent across all age groups, while year-to-date returns through July ranged from 11.9 per cent for younger members to 2.2 per cent for those approaching retirement.

Aon noted that members nearing retirement who plan to purchase a fixed annuity saw their portfolios fall by an average of 2.1 per cent in July, but the cost of buying a pension declined by 3 per cent as interest rates increased, resulting in an overall improvement in expected retirement outcomes.

For this group, the 2.2 per cent investment return achieved so far this year, combined with a 1.9 per cent reduction in pension purchase prices, has resulted in an overall improvement in expected retirement outcomes.

Overall, Aon concluded that defined contribution pension schemes have delivered strong returns so far in 2026.

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