The Dutch pension fund ABP achieved a positive investment return of 4.6 per cent, equal to €23.4bn, in the third quarter despite its financial position deteriorating slightly, its quarterly report has shown.

Its current coverage ratio fell by 1 percentage point from 115.6 per cent at the end of June 2024, to 114.6 per cent at the end of September 2024 (Q3). ABP said the lower actuarial interest rate was largely responsible for this.

However, the fund’s pension liabilities increased in Q3 by €24bn, reaching a total of €465bn. ABP said a fall in interest rates, had a “detrimental effect” on this. The fund’s available assets rose to €533bn at the end of Q3.

ABP said that bonds, equities, and real estate categories scored a plus, while the alternative investments category was negative (-0.3 per cent). Meanwhile, the actuarial interest rate fell by 0.3 per cent to 2.2 per cent in the third quarter.

Commenting on this, ABP board chairman, Harmen van Wijnen, said: “ABP’s financial position is fairly stable. We posted a good return this quarter, which almost compensated for the sharp increase in the value of all the future pension payments. That is a good thing. After all, our financial position is important to achieving our ambition of a pension with great purchasing power.

“Over the past three years, we have succeeded in achieving this: we have been able to allow pensions to grow in line with increased prices. We want to index the pension benefits of pensioners and the entitlements of people who are still accruing a pension next year as well.

“We have a few more exciting weeks to go until we reach a balanced decision at the end of November on the possible increase in pensions in 2025. Fortunately, as in the previous three years, ABP is able to make use of more flexible rules that allow us to make greater increases. We can, because we will be switching to the new pension system in 2027.”

The policy coverage ratio, the average of the current coverage ratios over the past 12 months, fell by 0.6 per cent in the third quarter, down from 114.2 per cent to 113.6 per cent.

At the end of November this year, ABP will again assess whether and how much pensions can be increased in 2025.

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