The indicative average funding ratio of Dutch pension funds stabilised at 117 per cent in May 2023, according to Aon’s latest Pension Thermometer.

Following an increase in April, Aon noted that a limited rise in interest rates combined with minimal portfolio movement in May meant that the average funding ratio remained relatively stable.

The indicative policy funding ratio, which is based on the average funding ratio over the past 12 months, also remained stable at 120 per cent.

Aon noted that, during the month, equities rose slightly, with developed market equities increasing by 1.1 per cent during the month and emerging market equities preforming slightly better at 1.8 per cent.

Rising interest rates had a slightly positive impact on fixed income assets, which increased by 0.2 per cent.

In total, the average portfolio return in May was -0.1 per cent, according to Aon.

Commenting within the Pension Thermometer on the Future Pensions Act, which was passed last week, Aon CEO wealth solutions, Frank Driessen, said: “Especially in the past three years, with a pandemic and a war, we have seen how quickly circumstances can change.

“From historically low interest rates to almost 3 per cent higher, times of massive inflation; a lot can happen in three years.

“This is a point of attention that needs to be paid close attention to in communication with participants.

“It is wise to act quickly. Not only to be able to properly prepare for the transition, but also to make optimal use of the possibilities offered by the new pension scheme.

“Now is the time to reassess the two most expensive terms of employment (salary and pension). The new pension scheme can be used very specifically for the financial well-being of employees.

“This is important, because this way employers increase the involvement, vitality and resilience of their employees.”

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