Dutch pension fund assets increased in 2024 but liabilities remained roughly the same, according to Aon Netherlands.

Aon’s Pension Thermometer revealed that during the first half of 2024 interest rates rose, before falling and then rising again in the last month of the year. Over the whole of 2024, interest rates fell on balance.

Aon said that pension funds’ increased interest rate hedging maintained the funding ratio. The indicative average coverage ratio of Dutch pension funds rose from 115 per cent to 116 per cent during 2024.

In addition, the indicative policy funding ratio, based on the average funding ratio of the past 12 months, fell from 118 per cent to 117 per cent in 2024.

Aon said that in 2025, pension indexation increases will be “less substantial” than last year, as pension funds take into account the transition to the new system. It said that few funds are taking advantage of the transition-FTK that offers extended indexation possibilities.

In regard to assets, Aon said that at the beginning of the year “expectations for financial markets were tense” but it turned out to be a “very good year for investments”.

However, December, the last month of the year, ended without a rally, but the market consolidated the good performance. For instance, developed country equities fell almost 1 per cent, but emerging markets equities still managed to rise 2 per cent.

Interest rates rose in December, causing the fixed-income portfolio to fall and achieve a return of around -3.5 per cent. The overall portfolio return in December was -2.2 per cent.

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