The indicative average funding ratio of Dutch pension funds stabilised at 118 per cent in February, according to Aon Netherlands’ Pension Thermometer.

Aon said equity returns combined with a fall in interest rates led to a marginal increase in funding ratios. In addition, the indicative policy funding ratio, based on the average funding ratio of the past twelve months, remained the same at 118 per cent in February.

During the month, equities presented a mixed picture. Developed market equities fell 0.9 per cent but European equities extended the good start to 2025 with a return of 3.6 per cent.

Aon said this was partly due to the chance that Trump's negotiations with Putin could stop the war between Ukraine and Russia. Emerging markets rose 0.4 per cent in February.

In the eurozone, bond yields fell, and the fixed-income portfolio rose by 0.8 per cent. For example, riskier bonds achieved a positive return: Credits 0.6 per cent, high yield 0.7 per cent and emerging market debt 1.4 per cent. Overall, the return on the portfolio was -0.1 per cent.

Furthermore, interest rates fell over the month. On balance, the risk-free interest rate fell by an average of two basis points over the first 40 years in one month. There was a decline in short-term interest rates, but at the long end, from the age of 23, interest rates rose, Aon said.

The ultimate forward rate (UFR), which pension funds use to calculate the value of their future liabilities, came in at 1.5 per cent.

Therefore, due to the movement in interest rates, the value of the liabilities decreased by about 0.5 per cent. Due to the decrease in assets in February of approximately 0.1 per cent, there was a net increase in the funding ratio of approximately 0.5 per cent.

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