Increase in average funding ratio since end-June
- Statistical News Release
Date 20 September 2012
The average funding ratio of Dutch pension funds climbed to 97% in August, up from 94% at end-June. The improvement in the funding ratio – the ratio of available assets to liabilities – was driven by positive returns on equities in an environment of relatively stable long-term interest rates.
Average long-term interest rates (Table 1.3) remained relatively stable between June and August, with 30-year interest rates falling slightly from 2.27% to 2.24%. Lower interest rates generally mean that pension funds must put more funds aside for future benefit payments. However, as these changes in interest rates were so small, their effect on the liabilities was negligible. Overall, this resulted in an increase in the funding ratio.