Dutch pension fund PFZW returned 8.7 per cent on its investments in 2023, up from a negative return of -22.6 per cent in 2022, its annual report has revealed.

During the year, PFZW’s invested capital increased from €216.5bn to €237.6bn amid the positive investment performance.

Despite the improved returns, the pension fund’s current funding ratio fell from 108.7 per cent to 106.1 per cent during the year.

PFZW stated that this was due to falling interest rates in the fourth quarter and the 4.8 per cent increase in pensions it enacted on 1 January 2024.

This was PFZW’s third pension increase since October 2022, in which time it has risen by more than 13 per cent.

The pension fund’s investments in line with the Sustainable Development Goals fell from 21.5 per cent of its portfolio to 19.9 per cent in 2023, with PFZW targeting a 30 per cent allocation by 2030.

Its absolute CO2 reduction compared to the 2019 benchmark remained at -43 per cent in 2023.

Commenting in the foreword of the annual report, PFZW board chair, Joanne Kellermann, said: “These are turbulent and exciting times. The year 2023 was no exception.

“For example, on 1 July 2023, the Future Pensions Act entered into force. For PFZW, that was the decisive factor in the image of 2023: Preparing for the new pension scheme.

“We still strive to the switch to the new scheme on 1 January 2026. Everyone within PFZW and PGGM is involved and worked with incredible dedication to achieve the planned implementation date. We are convinced that the new pension system is good for current and prospective participants and employers.”

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