Dutch pension fund PME returned 8.7 per cent on its investments in 2023, its annual report has revealed.

This represents a strong improvement from its return in 2022, which was -23.3 per cent.

The pension fund’s positive return in 2023 was driven by a 17.1 per cent return on equities, while its return on high-yield securities was 9.8 per cent.

However, PME’s return on its property investments was -10.5 per cent during the year.

While its coverage ratio fell slightly from 110.4 per cent at the end of 2022 to 109.4 per cent at the end of 2023, PME’s policy funding ratio, which is the average of the previous 12 months’ coverage funding ratios, rose from 111.7 per cent to 113.3 per cent during the same period.

PME’s positive returns and improved policy funding ratio allowed the pension fund to increase pensions by 3.26 per cent in 2023.

The Netherlands is currently transitioning to the new pension system following an agreement in parliament to adopt the Future Pensions Act.

At the end of the first quarter of 2024, PME and its social partners reached an agreement for a new pension scheme from 1 January 2026.

“Last year was an important year for making our pension system future-proof,” commented PME executive board chair, Eric Uijen.

“The Future Pensions Act came into effect on 1 July 2023. PME has been working on preparations for the new system for years. We do this together with our executor TKP and asset manager MN. Proper implementation of the new pension scheme now has the highest priority.

“In addition to the implementation side, we are also working hard to inform our participants and pensioners. And as far as PME is concerned, that is not a one-way street.

“By organising webinars and physical meetings, we engage in conversation, answer questions and inform our participants about their pension. Our pension consultants play an important role in this. They give presentations at companies and engage in one-on-one discussions with the participant, at the employer or at locations in the region.

“With this personal approach, we aim for our participants and pensioners to approach the new pension system with confidence.”

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