Dutch pension fund BPFBouw had an investment return of -21.4 per cent in 2022, its annual report has revealed.

This corresponds to losses of €17bn during the year, with the pension fund’s invested capital falling from €77.9bn to €60.9bn.

BPFBouw’s average annual return over the past five years was 1.6 per cent.

Despite the investment losses, the pension fund’s policy funding ratio increased from 119.3 per cent to 131.5 per cent over the year.

BPFBouw’s equity decreased from €15.7bn at the end of 2021 to €11.1bn at the end of 2022, with a fall in assets partly attributed to unrest in financial markets, as well as the pension indexation of 14.52 per cent.

Meanwhile, rising interest rates reduced the level of the pension fund’s liabilities.

In total, the pension fund paid out €1.4bn in pensions, while it collected €1.2bn in premiums.

“BpfBOUW has developed well financially in 2022,” the pension fund stated. “We were able to significantly increase pensions and are progressive in responsible investment.

“The board decided to increase pensions by 1 January 2023 by no less than 14.52 per cent. We did this because of inflation, so that the value of your pension is preserved. We also had enough financial room to increase pensions.

“We have never been able to raise pensions this much in one go. We are very happy with that.

“Despite this increase, we still have a solid financial basis. This will help us with the transition to the new pension contract.

“In the transition to the new pension system, we want to stick to our vision on pensions. We want a collective pension system designed in solidarity. This means that we jointly share the financial risks such as death and disability.

“It provides a good pension for people in the construction industry. The board of BPFBouw does everything it can to keep it that way. Even if we switch to the new pension system.

“In the coming years we will seize these kinds of challenges with both hands. We work closely with our social partners in this regard.”

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