The indicative average funding ratio of Dutch pension funds increased by 3 percentage points to 119 per cent in April 2023, according to Aon’s latest Pension Thermometer.

Following a fall in the average funding ratio in March, pension funds in the Netherlands benefitted from the rise in interest rates in April, Aon noted.

Due to the rise in interest rates, the value of pension funds’ liabilities decreased by approximately 1.5 per cent.

The indicative policy funding ratio, which is based on the average funding ratio over the past 12 months, fell to 120 per cent in April.

Aon noted that US equities fell slightly over the month, while European equities rose by 2.8 per cent.

European equities benefited more from the reopening of the Chinese economy, according to the consultancy.

This resulted in an equity return of 0.8 per cent for developed markets, while emerging market equities decreased by 2.7 per cent.

Meanwhile, the rise in interest rates had a negative impact on fixed income investments, which fell by 0.4 per cent.

The overall average portfolio return in April was 0.2 per cent, Aon stated.

Commenting on the Senate’s intention to discuss the Future Pensions Act in May, Aon Netherlands CEO, Frank Driessen, said: “We understand that there is a lot of criticism of the law, but we also think that the point of no return has been reached.

“Doesn't mean that we think all criticism should be put aside. Some points are justified and useful to take with you. Such as, for example, the entry into service and the survivor's pension.

“The complexity of the entry and the fact that individual consent is not allowed could lead to situations in which pension funds do not enter immediately. With regard to the survivor's pension, situations may arise in which participants can obtain enormously high rights due to the respectful effect.

“And we also agree that it is still difficult to follow, but that has its reasons and backgrounds. It is therefore important that participants are well informed and guided through the transition.

“We advocate that participants are given the right to a personal interview to be informed about their personal pension situation.”

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