ABP’s so-called funding ratio dropped from over 110% in December to less than 108% in January. This means that the largest fund in the Netherlands has just under €1.08 for every euro of future pension obligations. In metal funds PME and PMT, the indicators also deteriorated by a few percentage points to approximately 105% and 103% respectively. PFZW has not yet released any figures for January.
stock market downer
A poll by research firm Aon recently indicated that many funds suffered investment setbacks in January as a result of losses on global stock markets. To determine whether a fund can increase pensions, the average funding ratio over the past twelve months is looked at. Those indicators are lower across the board and the downer in January ensures that they remain longer at a level at which funds are not allowed to index yet under the current rules.
‘Hard observation’
The figures for December already showed that the largest pension funds in the Netherlands were not yet ready financially to increase their pensions. “At a time when groceries are becoming more and more expensive and energy prices are rising rapidly, that is a hard observation,” said Joanne Kellermann of PFZW’s board of directors at the time.
However, ABP indicated that it hopes that the rules will be relaxed somewhat soon. Then an increase in pensions might soon come into view, according to ABP. But then the tide has to be on its way financially.