Dutch pension funds’ financial position deteriorated
The financial position of nearly all pension funds in the Netherlands deteriorated in the fourth quarter of 2018 as a result of significant declines in stock markets and falling interest rates. Data submitted by Dutch pension funds to De Nederlandsche Bank (DNB) show that their assets declined by EUR 46 billion to EUR 1,328 billion, while their liabilities increased by EUR 40 billion to EUR 1,286 billion.
Funding ratio of pension funds down to 103.3% by 7 percentage points
The funding ratio, which reflects a pension fund's financial position, slumped to 103.3% at the end of the fourth quarter from 110.3% at the end of the third quarter (see Chart 1).
For the sector as a whole, the policy funding ratio (the average of the funding ratios over the past twelve months) fell by 0.6 percentage points to 108.4%. While this is still above the statutory minimum policy funding ratio of 104.2%, it conceals the fact that most members have pension rights in a fund with a considerably lower policy funding ratio.
Most members participate in pension funds that do not meet the statutory minimum policy funding ratio requirement
Like at end-2017, most active and deferred members and pensioners have pension rights in a fund with a policy funding ratio that is below the statutory minimum policy funding ratio (see Chart 2).
At the end of 2018, 3.5 million active members, 4.9 million deferred members and 2.0 million pensioners have pension rights in a fund that does not meet the statutory minimum policy funding ratio requirement. These figures represent 63% of all active members, 50% of all deferred members and 59% of all pensioners.
We used the following statistics to compile this news release: