Dutch pension fund PME had a “dynamic” 2024 as it achieved an annual return of 8.7 per cent and its assets increased by €5.3bn to €59.9bn.

In addition to this, the fund supported the social partners with the creation of the new pension scheme, which resulted in a transition plan that PME published on its website in the autumn.

Last year also saw PME postpone the target date for the transition to the new system by a year to 1 January 2027. It was also unable to fully compensate for inflation with the 0.3 per cent pension increase.

The fund’s funding ratio was 113.1 per cent at the end of December 2024, while its policy funding ratio was 112.7 per cent.

The fourth quarter of 2024 also saw PME’s investment return increase by 1.9 per cent, while pension liabilities increased to approximately €53bn.

PME pension fund executive board chairman, Eric Uijen, said he was “pleased” that its social partners completed their transition plan but felt a “personal disappointment” that it had to postpone the target date for the transition to the new system.

“In our policy decisions, we remain dependent on interest rates and the impact on the funding ratio. This funding ratio ultimately determines whether and by how much we can increase pensions and how smoothly the transition to the new system will go,” he continued.

“Of course, PME is therefore trying to protect that funding ratio. But you can never fully control it. That is why PME decided in the spring not to make use of the relaxed regulations on increasing pensions.

“PME has already made use of these relaxed rules three times and has thus increased pensions by a total of more than 11 per cent.

“The generational effects of these previous increases, combined with a greater chance that PME will have to lower more quickly in the face of headwinds, meant that we made a different choice in the spring.

“The consequence of this decision is a small pension increase of 0.3 per cent on 1 January 2025.”

However, Uijen acknowledged that although this did not compensate for the increased prices, PME believes that it is a balanced decision.

Uijen said a discussion arose in 2024 about whether pension funds should invest as an “activist”, and said PME invests in the interest of a good pension for its participants.

“In our investment policy, we therefore also take into account what the future will look like. Including sustainability considerations in the implementation of the investment policy is neither activist nor idealistic. It's realistic and rational,” he stated.

Uijen also said that 2024 saw the first funds switch to the new pension rules, and PME and their administrators are working “very hard” to switch to the new system next year or the year after.

"An important condition for a successful transition is the stability of laws and regulations," he added.

The Senate adopted the rules on 30 May 2023, which PME said allowed pension administrators time to adjust.

Uijen said it is important not to change these rules during the transition to avoid capital destruction and increased costs.

He also suggested that Agnes Joseph's proposed referendum undermined this stability, creating legal inequality and instability.

"That is not a permanent government policy. I keep hope that a sensible decision will be made about this," he concluded.

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