Pension sector funding ratio down

Pension sector funding ratio down

In the fourth quarter of 2023, Dutch pension funds saw their average funding ratios deteriorate relative to the third quarter, as the value of their liabilities increased more than the value of their investments. Total investments increased by €141 billion to €1,564 billion, while aggregate liabilities increased by €210 billion to €1,365 billion. The funding ratio reflects a pension fund's current financial position, expressing the ratio between investments and liabilities.

Published: 30 January 2024

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The Dutch pension sector's average funding ratio came to 114.6%. This represents an 8.5 percentage point decrease from the previous quarter (see Figure 1). This puts it below the figure for a year ago, which was 115.8%. This change is partly attributable to the indexation granted in 2023.

The policy funding ratio came to 118.4%.

This represents a 0.5 percentage point decrease from the previous quarter. The policy funding ratio is the average of the funding ratios for the past twelve months. It fell because the funding ratios in the fourth quarter of 2023 were lower than those in the corresponding quarter of 2022.

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