Good news at last for Dutch giant ABP

Dutch civil service pension ABP is more than fully funded, its latest quarterly report shows. A 0.1 per cent rise in effective interest rates and a 3.6 per cent return from its assets saw the funding ratio increase to 101 per cent by the end of March. A recent reduction in pension rights also contributed to the recovery.

Fund chairman Henk Brouwer said: “We’re pleased that ABP’s funding ratio rose by five percentage points in the first quarter; at last we have some good news for our participants. However, what is even more important for them is where ABP’s funding ratio will be at the end of the year.”

The fund must achieve a minimum funding ratio of 104.2 per cent by the end of the year to comply with a recovery plan set by the Dutch central bank (DNB).

Brouwer continued: “We have had a good first quarter, but there are still three to go. We’re doing our best but are very dependent on what happens in the financial markets.”

The fund saw positive returns from almost all asset classes in the first quarter, with an overall return of 3.6 per cent (€10.0bn). Developed market equities made the most significant contribution, adding €7bn to bring the fund’s total available assets to €292bn, against liabilities of €289bn.

Last year ABP achieved an overall return of 13.7 per cent. However, increased longevity resulted in a fall in the funding ratio of 1.8 per cent at the year end, prompting the scheme to cut pensions by 0.5 per cent from this April.

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