Dutch pension fund ABP has revealed that its funding ratio rose from 110.6 per cent to 110.9 per cent in 2022, despite negative returns during the year.

In the first three quarters, the pension fund’s current funding ratio rose to 124.2 per cent, before falling to 110.9 per cent by the end of the year as the pension increase of 11.96 per cent was incorporated in the calculation.

The fund’s policy funding ratio, which is the average of the past 12 months’ current funding ratios, increased during the year from 102.8 per cent to 118.6 per cent.

Meanwhile, ABP’s available assets fell from €552bn to €459bn in 2022, with a return of -17.6 per cent recorded during the year.

ABP attributed the negative return primarily to the poor performance of financial markets due to the war in Ukraine.

In the fourth quarter, the return was -1.2 per cent.

ABP chairman of the board, Harmen Van Wijnen, stated that 2022 was the year of “contradictory developments".

“For the first time since 2008, we have a substantial negative investment result,” he continued.

“And at the same time we decided, also for the first time since 2008, to a full pension increase of over 14 per cent [including the 2.39 per cent increase in July].

“An increase that benefits all participants in the short or longer term. And which was very welcome among pensioners, because of the increased prices.

“Even after this increase in pensions and a disappointing investment result, we still have enough fat on our bones. The funding ratios have remained above the minimum required level.

“These contradictory developments in 2022 once again underline the need for a renewed pension system. We want to start doing that in 2026.”

Share Story: