Dutch pension funds’ financial position improved

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The financial position of Dutch pension funds improved in the fourth quarter of 2019 compared to the previous quarter. Liabilities went down EUR 96 billion to EUR 1,500 billion. Pension funds' assets also fell, by EUR 6 billion, to EUR 1,560 billion. The financial position improved, since the decline in liabilities exceeded the decrease in assets.

Published: 24 January 2020

Funding ratio up to 104.0%

The pension funds’ funding ratio went up 5.8 percentage points, to 104.0% at the end of the fourth quarter (see Figure 1). The funding ratio reflects a pension fund’s current financial position, expressing the ratio between available assets and liabilities.

By contrast, the policy funding ratio fell by 1.1 percentage points to 102.2%. The policy funding ratio is the average of the funding ratios for the past twelve months. It fell because the funding ratios in the fourth quarter of 2019 were lower than those in the fourth quarter of 2018. The minimum statutory required policy funding ratio differs for each pension fund, but in almost all cases hovers around 104.2%.

Source: DNB statistics

At De Nederlandsche Bank, we independently compile statistics on the Dutch financial sector and economy. This article is based on these statistics. More information on our statistics and all dashboards can be found on our Statistics homepage.

Most members are served by pension funds whose policy funding ratio is below the statutory limit

At the end of the fourth quarter of 2019, 3.9 million active members were served by one of the 75 pension funds with a policy funding ratio below 104.2%. This concerns 68% of all active members (see Figure 2). These pension funds also represent 5.8 million deferred members and 2.3 million pensioners, totalling 58% of all deferred members and 68% of all pensioners, respectively.

The policy funding ratios of 56 pension funds are above the 104.2% limit, but below the limit of 110% above which full or partial index-linking is permitted. Together these funds represent 1.4 million active members, 3.4 million deferred members and 0.5 million pensioners.

A total of 72 pension funds have a policy funding ratio of 110% or more, and they are permitted to apply full or partial index-linking. Together these funds represent 0.4 million active members, 0.8 million deferred members and 0.6 million pensioners.

Further information

We used the following statistics to compile this news release:

  • Funding ratios
  • Interest rate term structure (IRTS)
  • Equity markets
  • Euro exchange rates
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