The Dutch pension fund ABP, for those working in government and education, suffered an investment loss of 0.7 per cent in the second quarter of 2024, it has revealed.

Despite this, its funding ratio increased to 115.6 per cent in the second quarter of 2024, up from 112.9 per cent at the end of the first quarter. The pension fund attributed the increase in the funding ratio to increased interest rates, despite the total return on its investments being negative.

Although equity investments, among others, performed positively, ABP said that bonds suffered from higher interest rates.

Commenting, ABP board chairman, Harmen van Wijnen, said: "Over the first six months of 2024, ABP's return is in the plus by 1.8 per cent (+€9.1bn). The stock markets continue to do well and the economy just keeps turning. This is quite extraordinary in these troubled times with a lot of tension due to war and conflicts in Ukraine and the Middle East.

“Our financial position improved again this quarter. This was mainly because interest rates went up. Our funding ratio, the measure of our financial position, rose to 115.6 per cent. That means that for every €100 pension ABP pays now and in the future, we have €115.60 on hand."

In addition, the policy coverage ratio – the average of the current coverage ratios over the last 12 months – rose by 0.4 per cent, from 113.8 per cent to 114.2 per cent.

As part of the process of transitioning to the new pension system, ABP will assess each July, starting from 2024, whether pensions should be reduced; it said that currently, pensions do not need to be reduced. At the end of November this year, ABP will assess whether and by how much pensions can be increased in 2025.

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