Dutch average funding ratio remains stable at 121% - Aon

The average Dutch funding ratio remained stable at 121 per cent over November, according to Aon Netherlands.

The policy funding ratio, which is the average of the funding ratio over a 12-month period, also stabilised at 119 per cent. Aon said that despite substantial interest rate declines, good stock returns kept the figures the same as the previous month.

Pension fund assets ‘increased significantly’ due to the good results on equities and fixed income securities – shares rose 6.6 per cent over the month.

Developed market equities rose 6.9 per cent and emerging markets 4.6 per cent. The fixed income portfolio increased by 9 per cent as a result of falling interest rates. Furthermore, riskier bonds painted a positive picture: credits (2.3 per cent), high yield (4.5 per cent) and emerging markets hard currency (5.8 per cent). The total return of the portfolio this month was more than 7 per cent.

In regard to indexation in 2024, Aon said that pensioners should not count on substantial indexation as of 1 January 2024. This is due to the consumer price index falling in October, which now means there is deflation. However the General Administrative Order (AMvB), which has been extended for another year, offers an opportunity for pension funds do something. Under certain conditions, this General Administrative Order makes it possible to repair some of the missed indexation as of 1 January 2023.

Dutch pension schemes are busy with transitioning to the new Dutch pension system, with the deadline set for 1 January 2025.

“Social partners and pension funds are taking steps and making progress with the details of the contract. All in all, the transition appears to be an extensive process, in which the details are sometimes difficult to fill in. In addition, the actual transition often takes place years later," Aon Netherlands Wealth Solutions CEO, Frank Driessen, said.

"For this reason, we see that transition plans are sometimes determined in outline, in order to arrive at the final calculations and the exact implementation takes place at a later stage."

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