Pensioenfonds SNS Reaal coverage ratio declines in 2020

The coverage ratio of Pensioenfonds SNS Reaal decreased from 111.7 per cent to 111.5 per cent in 2020, which it attributed to the sharp fall in interest rates.

However, the Dutch pension fund explained that the impact of this had been limited because it had hedged part of the risk of a fall in interest rates and because the stock markets recovered from previous price falls from April 2020.

The scheme had assets of €4.4bn and liabilities of €3.95bn by the end of 2020, with the former having increased by €458m and the later by €417m.

The scheme’s policy funding ratio stood at 107.5 per cent by the end of the year, leaving it unable to increase accrued and commenced pensions on 1 January 2021.

The scheme added that, although financial markets had “largely recovered from a low in mid-March 2020, there is still uncertainty about the economic outlook for 2021 and beyond”.

The scheme currently has more than 5,138 employees accruing pensions and pays out income to almost 4,204 pensioners, as well as 11,306 former participants.

Contributions stood at €73.7m over the course of the year, unchanged from 2019, while the amount of benefits paid out increased by €1.9m to €69.3m.

In addition to the financial information, the fund said its board was currently preparing for the introduction of the new Dutch pension system before 2027, stating: “The board is investigating how, together with the social partners, it can realise the transition from the pension fund to the new pension agreement in the best way for the participants.”

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