Statistical News Release: Financial position of Dutch pension funds remains inadequate
The financial position of the Dutch pension funds improved in the first quarter of 2019, but it is still not entirely adequate. Data submitted by Dutch pension funds to De Nederlandsche Bank (DNB) show that their total assets grew by EUR 105 billion to over EUR 1,433 billion, mainly on the back of strengthened equity prices worldwide. Their financial commitments, however, also went up, by EUR 80 billion to EUR 1,367 billion, primarily due to further declines in interest rates.
Funding ratio of pension funds reached 104.8%
A pension fund's current funding ratio reflects its financial soundness. For the Dutch pension sector as a whole, it stood at 104.8% at the end of the first quarter of 2019, up 1.5 percentage points from the preceding quarter (see Chart 1). The policy funding ratio is the average of the funding ratios for the past twelve months. For the sector as a whole this ratio, which is relevant where benefit curtailments are concerned, receded by 1.1 percentage points to 107.3%.
56% of all pension rights are administered by pension funds whose policy funding ratio is below the statutory minimum
Around 56% of all pension rights are administered by the 44 Dutch pension funds that have a policy funding ratio below the 104.2% minimum required by law. They are the pension rights of 63% of all active members (3.5 million active members), 51% of all deferred members (4.9 million deferred members) and 60% of all pensioners (1.9 million pensioners), see Chart 2.
Roughly one in five pension rights are administered by 112 pension funds that have a policy funding rate above 110%, which means these pension funds are allowed by law to make sure pension benefits keep pace with inflation or wage increases. They are the pension rights of 1 million active and 2.1 million deferred members and 0.9 million pensioners. An individual may have various pension rights that are administered by multiple pension funds, for example because they work for several employers or did so in the past. The pension rights administered by pension funds accrue under occupational pension schemes. They supplement Dutch state pension benefits. Combined, Dutch pension funds currently administer the pension rights of 5.6 million active and 9.7 million deferred members and 3.3 million pensioners.
We used the following statistics to compile this news release: