In February, 29 pension funds announced cuts to be applied from April 2014. A decision to cut pensions is included in pension funds’ liabilities after the decision-making process, in this case in February 2014. As a result, the liabilities, generally referred to as technical provisions, decreased in this period. In addition, capital market rates fell, resulting in an increase in the value of the fixed-income portfolio, which also had a positive effect on the funding ratio.
On the other hand, the interest rate term structure including UFR and averaging (Table 1.3) declined, which resulted in an increase in technical provisions. Share prices (Table 3.1) had a limited effect on the funding ratio. The AEX was down 0.8% between end-December and end-February and the MSCI World index was up 0.6%. Overall, these developments resulted in a net funding ratio increase of one percentage point.
Pension funds’ funding ratios (end-of-month figures)