Large funds want to increase pension, but are not yet able to do so

Photo: ANP

The largest pension funds in the Netherlands would like to increase pensions, but are not yet able to do so. At the end of last year, their financial position was still too meager for that. In their quarterly reports, the funds realize that this is a painful message.

“At a time when groceries are becoming more and more expensive and energy prices are rising rapidly, this is a hard observation,” says Joanne Kellermann, chairman of the board of care fund PFZW, for example. The policy funding ratio, the indicator on the basis of which it is decided whether pensions can be increased, remained at just under 100 percent at PFZW. This means that for every euro in future pension obligations, the fund also has approximately one euro in cash. According to the rules, that’s too little. “We therefore hope for a further recovery soon, which will bring partial indexation of pensions back into the picture.”

Civil servants fund ABP scores slightly better with almost 103%, but the conclusion is the same. ABP does hope that the rules will be relaxed somewhat soon. If the tide is going well financially, an increase in pensions might soon come into view. “From 1 July this year, the minimum policy funding ratio at which we are allowed to increase will most likely fall from 110 percent to 105 percent,” explains chairman Harmen van Wijnen of the executive board. “As soon as we are allowed to increase pensions, it is our intention to do so. We are investigating the date from which we can implement this if the policy funding ratio exceeds 105 percent in the course of this year.”

Metaalfonds PME states that it understands the disappointment of pensioners well. The policy funding ratio there is currently more than 103 percent. The other major metal fund, PMT, is slightly below this at almost 101 percent. All major funds notice that their financial situation is getting better. Good business was done with investments last quarter. The funds also benefited from rising interest rates on the financial markets. The fear of possible pension cuts, which was previously feared, has therefore ebbed away.

Of the larger funds, only bpfBOUW has been in good shape for some time. The policy funding ratio has now risen to more than 119 percent. At bpfBOUW, pensions have also increased somewhat as of this year. However, it was only a partial indexation. This means that pensions have not been increased as much as the sharply accelerating inflation.