Pension funds' average funding ratio increases to 102%

Statistical News Release
Date 14 December 2012
The average funding ratio of Dutch pension funds at the end of November stood at 102% (compared to 101% at the end of September). This is the highest level since June 2011. The funding ratio – the ratio of available assets to liabilities – has gone up in particular thanks to positive returns on investments. The interest rate term structure has barely changed since then.    
 

Pension funds' available assets increased as a result of positive investment returns. Stock market indices grew between October and November (see Table 3.1). The MSCI World Index, which is important to pension funds, was up by 1%. Pension funds also realised positive returns on their bond portfolios thanks to the decline of the capital market rates. In this period, the interest rate on the latest 10-year government bond declined by approximately 12 basis points to 1.6% (see Table 1.2.1). The value of the liabilities remained broadly stable, seeing that there were few adjustments to the interest rate term structure as a whole (see Table 1.3).
 
At the end of November, 165 pension funds had a funding ratio below 105% (against 187 at the end of September) and consequently faced a funding deficit. Together they represent 4.4 million active members and 2.2 million retirees.
 

Funding ratio of pension funds