Dutch pension fund BpfBouw achieved an investment return of 7.7 per cent in 2023, its annual report has revealed.

This represents a vast improvement on the -21.4 per cent return the pension fund experienced in 2022.

The pension fund noted that while 2023 had been a good investment year and that its financial position was solid, it was unable to increase pensions on 1 January 2024.

“On 1 January 2023, we increased pensions by 14.52 per cent,” commented BpfBouw CEO, Eline Lundgren.

“That was a very large increase, and participants were happy with it. I understand very well that participants are disappointed that BpfBouw did not also increase pensions on 1 January 2024, despite our good financial situation.”

BpfBouw stated that it can increase pension if there is an inflation increase but, according to the indicator of the Central Bureau of Statistics it uses (the derived consumer price index), there was an inflation decline.

Furthermore, despite the positive investment performance, BpfBouw’s policy funding ratio fell from 131.5 per cent at the end of 2022 to 124.7 per cent at the end of 2023.

It noted that the policy funding ratio indicates whether a pension fund has sufficient funds to pay pensions now and in the future and, as it stands, the pension fund is “well prepared” for the transition to the new pension system.

The pension fund is aiming to switch to the new pension system on 1 January 2026, and wants to try and compensate members who may lose out during the transition.

“Whether that will be the case and how much compensation will be involved will become apparent later,” Lundgren said. “In any case, we are in a good position.”

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