In the largest Dutch pension fund ABP, assets fell from €552 billion at the end of 2021 to €459 billion at the end of last year. The fund says this is mainly due to the misery on the financial markets following the war in Ukraine. At the same time, interest rates have risen sharply. For these reasons, ABP faced large losses on its investments, but its financial liabilities actually decreased. In this way, the so-called funding ratio, the most important financial indicator, rose, which finally gave ABP the opportunity to increase pensions again.
The quarterly reports of the other major funds contain the same messages. There, too, much capital disappeared, but the funds needed to keep less cash and be able to meet obligations. “The increased interest means you need less money to buy a pension,” explains PMT metal fund employer president Terry Troost.
Ease
Joanne Kellermann of the PFZW welfare fund also clarifies that the rules for increasing pensions, with the new pension system in sight, have also been relaxed a bit. This ensured that millions of retirees could finally be offered an extra pension after years. The big pension funds have already announced that they will increase their pensions for this year. Next autumn, it will be re-examined whether pensions will change in 2024 or stay the same. The funds are not yet making predictions about it.
Troubled economic year
The fact that last year was such a strange year is actually not good for the chairman of the board of metalektrofonds PME Eric Uijen. “Although I am happy to be able to increase further, the economic and international situation in which we are doing so is worrying. Unprecedented high inflation means participants and retirees are having a tough time,” he says. He therefore hopes for “calmer economic waters” for 2023.