Dutch pension fund PGB has revealed that its return on investments over the first three quarters of 2023 was -0.4 per cent, as at 30 September 2023.

During this period, the value of the pension fund’s total investments fell by €0.2bn to €28.6bn.

Meanwhile, PGB’s liabilities fell from €25.6bn to €23.8bn over the same timeframe, which was primarily driven by an increase in interest rates.

Its return on investments in its matching portfolio, which consists of euro government bonds among other investments to hedge interest rate risk, was -8.1 per cent in Q1-Q3, which the pension fund attributed to rising interest rates.

However, the pension fund’s return portfolio, which largely consist of equity investments, achieved a return of 4.5 per cent over the first three quarters of 2023.

Despite the negative investment performance, PGB’s policy funding ratio, which is an average of the current funding ratio over the previous 12 months, increased by 0.2 percentage points to 117.3 per cent in the third quarter of 2023.

Its current funding ratio rose from 117 per cent to 120.7 per cent in the third quarter of the year.

PGB’s return on defined contribution pensions in Q1-Q3 was 2.6 per cent for those aged 49 or younger, 1.4 per cent for those aged between 50 and 55, 0.1 per cent for 56-61 year olds, and -1.2 per cent for those aged 62 and older.

Commenting on the quarterly report, PGB board chair, Jochem Dijckmeester, said: “We experienced negative results on the financial markets in the third quarter.

“Our investments were also affected by this, causing us to achieve a negative return in the third quarter. The return for the first half of the year was good. But because of a disappointing third quarter, we ended up with a return of -0.4 per cent at the end of September.

“However, our financial situation improved thanks to rising interest rates. Thanks to those higher interest rates, we do not need to keep so much money in reserve to pay the pensions.

“On 1 July 2023, the Future Pensions Act also came into effect. Now we, together with our employers and social partners, can continue with the introduction of the new pension rules. We work together on this and offer guidance on the choices they have to make.

“We also continue to notify our participants so they know where they stand. And that they can rely on us to take care of their pension as best as possible. We do this for each other.

“It is not yet known whether Pensioenfonds PGB can increase pensions again. The board will decide on this in November.”

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