Dutch pension fund PME increased pensions by 0.3 per cent in 2024 amid economic turbulence and upcoming pension system reform, its annual results have revealed.

According to the results, the fund’s total asset management costs (including transaction costs) decreased slightly in 2024, from 0.404 per cent to 0.397 per cent of the average amount invested.

However, the cost per participant for managing pensions increased from €103 to €115, which the fund credited to temporary extra investments as it prepares for the transition to the new system in 2027.

The results also showed PME had a “dynamic” 2024 as it achieved an annual return of 8.7 per cent and its assets increased by €5.3bn to €5.9bn.

In addition to this, PME’s annual report showed that in 2021, it raised €1.2bn from fossil fuel investments and this money has been fully reinvested into sustainable energy projects.

In 2024, it also implemented the new environmental, social and governance (ESG) framework for the selection of developed country stocks it had defined in 2023.

PME said its ambition was to fully complete the redesign of the developed countries portfolio by the first quarter of 2026 and to reduce it from more than 1,400 to approximately 1,000 companies, with a focus on around 250.

For the European ESG focus portfolio, it selected asset manager Candriam in 2024.

The fund also increased its investments in 2024 in its sector by committing additional capital to DeeptechXL and the Strategic Partners Fund.

This commitment led to additional investments in Effect Photonics, Axelera AI and Nearfield Instruments, among others. With these investments, PME remains committed to successful Dutch start-ups and scale-ups.

The fund also believes investing in the Netherlands yields a positive and social return and by the end of 2024, approximately 15 per cent of its total investment portfolio will be invested there.

PME executive board chairman, Eric Uijen, said: “PME has achieved or exceeded many of the ambitions set. For example, we achieved a return of 8.7 per cent, we more than achieved our CO2 reduction target for the equity and corporate bond portfolios and we were able to welcome employers and the Honeywell Pension Fund.

“We also informed our participants and employers in many ways about the new pension rules and showed that they and our other stakeholders are satisfied and have confidence in PME.

“In 2024, pensioners gave us a 7.9 on satisfaction and an 8.1 on trust. Our other stakeholders rate us with a 7.9.”

He also noted that in 2024 PME decided to postpone the moment of transition to the new pension rules by a year, which he called “unfortunate” but said it guarantees “care in the process”.

“We also decided to increase pensions by a limited amount of 0.3 per cent on 1 January 2025. That was a difficult, but balanced decision. We ended the year with a funding ratio of 113 per cent, a stable starting point for the turbulent first two quarters of 2025,” he said.

Uijen added that the world has remained unstable through 2024 and early 2025, with global political and economic unrest growing, partly due to US President Donald Trump’s unpredictable policies.

In the Netherlands, he said that ongoing changes to pension laws caused “uncertainty and hurt confidence” in the pension sector.

He said he was “pleased” that the House of Representatives recognised that the changes would not benefit any participants and hoped for stability soon.

Uijen said PME is committed to keeping participants well informed about the pension transition, which he believes will lead to better stability and growth than the old system.

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