Several Dutch pension funds have published funding updates for their schemes, with all funds reporting a fall in current funding ratios.

The policy funding ratio of Pensioenfonds PostNL, the average of the current coverage ratios of the past 12 months, has risen slightly and currently stands at 132.1 per cent.

During the same period in 2023, the funding ratio stood at 128.3 per cent, showing a year-on-year increase.

However, the group's current funding ratio fell last month, from 131.7 per cent in November to 129.8 per cent in December 2024.

Interest rates rose in the past month, which has had a positive effect on the current funding ratio.

However, the value of investments fell in November, which had a negative impact on the funding ratio.

Therefore, the rise in interest rates had a greater effect than the fall in investments. This will lead to a slight increase in the current funding ratio in December 2024.

In addition to this, Dutch pension fund BpfBOUW saw its current funding ratio decreased in the fourth quarter of 2024, despite a positive return on investments.

Falling interest rates caused the current funding ratio to decrease by 1.8 per cent and ended at 125.8 per cent at the end of December 2024.

The fund’s policy funding ratio also fell by 0.3 per cent to 126.3 per cent in the past quarter.

Despite this, the fund achieved a positive return of 1.8 per cent on its investments over the last three months of the year, which it credited to the reaction of the financial markets to the election of Donald Trump.

According to the update, investments in equities also showed positive returns, with 2024 being a good investment year and the fund achieved a return of 7.5 per cent. The largest contributor to this was equity investments.

In the fourth quarter of 2024, the positive return ensured that BpfBOUW’s assets grew, while its liabilities increased sharply due to lower interest rates. As a result, its financial position deteriorated slightly.

BpfBOUW will increase the pension by 0.75 per cent as of 1 January 2025. The supplement of 0.75 per cent has already been included in the pension liabilities and the funding ratio at the end of December 2024.

Meanwhile, PMT's policy funding ratio fell from 109 per cent to 108.5 per cent at the end of December 2024.

Its current funding ratio also fell slightly in the fourth quarter from 109.6 per cent to 108.6 per cent.

The decrease is due to a fall in interest rates, which affects the value of its liabilities.

It said that 2024 was characterised by a positive return for both the matching and return portfolios, with the matching portfolio, designed to hedge the interest rate sensitivity of the liabilities, achieving a positive return of 2.6 per cent.

In addition to this, the risk-bearing return portfolio achieved a positive return of 1 per cent. Within this portfolio, stocks with a return of 2.4 per cent performed best, and high-yield achieved a return of 0.1 per cent and real estate achieved a return of -2.1 per cent.

The fund’s assets increased from €88.8bn to €90.6bn.

Commenting on PMT’s results, PMT employers’ chairman, Terry Troost, said: "We have achieved good investment results in 2024. At the same time, we saw interest rates fall, which is unfavourable for the funding ratio.

“Pensions will remain at the same level in 2025 because the board values a good financial position when we switch to the new pension scheme."

Adding to this, PMT employee chairman, Mieke van Veldhuizen, said: "A careful transition to the new system is paramount. This requires a healthy financial position with which we safeguard the interests of all participants who are accruing, have accrued, or receive a pension.

“We will continue to work hard this year on the preparations for this switch. We are concerned about the recent amendment proposal by NSC. Peace of mind and a stable legal framework are important conditions for a careful and efficient transition."

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