In February, 68 of the 415 pension funds announced cuts to be applied from April 2013. The pension funds’ decision to apply curtailment was included in their liabilities after the decision-making process, i.e. in February 2013. As a result the liabilities, generally referred to as technical reserves, decreased in this period. The modest increase in the interest rate term structure also contributed to the declining value of the technical reserves. A higher interest rate reduces the need of funds to set aside reserves for future benefit payments.
Pension funds’ average funding ratio increased to 104%
- Statistical News Release
Date 21 March 2013
The average funding ratio of Dutch pension funds increased to 104% in February 2013, compared with 102% at the end of December 2012. The funding ratio – the ratio of available assets to liabilities – has gone up after the cuts announced by pension funds in February had been included in the accounts. In addition, the interest rate term structure has increased and foreign equity prices have risen since December 2012.
At the end of February 2013, 145 pension funds had a funding ratio below 105% and consequently faced a funding deficit, 13 less than at year-end 2012. At end-February, the pension funds facing a funding deficit represented 3.9 million active members and 1.9 million pensioners.