The average funding ratio of Dutch pension schemes increased by 3.3 percentage points in the second quarter (Q2) of 2020, according to the country’s central bank and supervisor, DNB.
Over the period, financial markets began their recovery following the declines seen in the first quarter caused by the impact of Covid-19.
Pension funds’ assets increased by €106bn to €1,556bn. Liabilities increased by €56bn to €1,674bn. With the growth in assets outstripping that of liabilities, pension funds financial position improved.
The average funding ratio at the end of Q2 stood at 92.9 per cent, compared to 89.6 per cent. The funding ratio reflects a pension fund’s current financial position, expressing the ratio between available assets and liabilities.
However, schemes’ average policy funding ratio was 96.8 per cent at 30 June 2020. This represents a 2.9 percentage point decrease from 31 March 2020. The policy funding ratio is the average of the funding ratios for the past 12 months. It fell because the funding ratios in the Q2 of 2020 were lower than those in the corresponding quarter of 2019.
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