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Coronavirus takes bite out of coverage ratio of large pension funds Financial

The interest rate also went down. As a result, the threat of discounts remains.

ABP, the largest Dutch fund, saw its coverage ratio deteriorate to 94.1 percent, from 97.8 percent at the end of December. This means that for every euro that the civil servant fund must pay out in the future in pensions, ABP only has more than 94 cents in cash.

An ABP spokeswoman acknowledges that the corona virus made it difficult for the fund. “But interest also played a role. It’s really about a combination of the two. “

There was also a clear decline in the PFZW healthcare fund. Here the indicator went from 99.2 to 95.7 percent. Metal funds PME and PMT had a coverage ratio of around 99 percent at the end of last year. Now they score over 96 percent.

Discounts

The large pension funds do not have to make any discounts this year, partly due to temporary government intervention, but there is a chance that pensions will have to be reduced in the coming years.

ABP, among others, warned about this earlier this year. The sector is therefore anxiously awaiting the further elaboration of the pension agreement that the cabinet, employers and trade unions agreed last year.

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