The average Dutch funding ratio increased to 116 per cent over the month of January, according to the latest figures from Aon Netherlands.

In addition, according Aon’s Pension Thermometer, the policy funding ratio, which is the average of the funding ratio over the past 12 months, stabilised at 119 per cent.

Over the month, shares rose by 1.7 per cent; developed market equities rose 2.3 per cent, but emerging market equities fell 3 per cent. The fixed income portfolio fell by 1.2 per cent as a result of rising interest rates.

Riskier bonds were less affected by interest rate movements, as credits (0.2 per cent) and high yield (0 per cent) rose slightly. Only emerging market debt (hard currency) fell slightly more sharply (-1.7 per cent). The portfolio's total return was 0.5 per cent in January.

In regard to interest rates, the Ultimate Forward Rate (UFR), which pension funds use to calculate the value of their future liabilities, came in at 1.4 per cent. As a result of the rise in interest rates, the value of liabilities decreased by 1 per cent. Combined with the rise in assets of 0.5 per cent, the overall funding ratio increased by 1.5 per cent.

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