Major pension funds are looking rosier again

In their quarterly reports, the pension funds do not want to open the champagne bottles too early. Some indicate that the situation can change again just like that as a result of fluctuations in the financial markets.

‘No time to cheer’

At the metal fund PMT, for example, the coverage ratio rose in the second quarter from 98.8 to 101.5 percent. “That’s great, but it’s certainly not time to celebrate yet,” says Terry Troost, employer chairman of PMT. The fact that the funding ratio is above 100 means that for every euro of pension to be paid out, one euro is also invested at PMT.

At the PFZW health care fund, the indicator has also exceeded 100 percent, for the first time since May 2019. “We are not yet in safe waters, but it is a nice symbolic milestone,” says PFZW chairman of the board Joanne Kellermann.

Pension reduction

The improvement in the financial position of the funds is mainly due to rising interest rates on the financial markets. The funds have also been doing good business with their investments lately. The metal fund PME and the civil servant fund ABP already have a funding ratio of 104 and 104.5 percent respectively.

“I can therefore say for the first time in ages that the chance of a pension reduction next year is very small, but a pension increase is really not yet in sight”, ABP chairman Corien Wortmann-Kool notes.

At the end of this year, the funding ratios must be at least 90 percent, just like last year, to avoid pension cuts in 2022. The government has also determined that in the run-up to the new pension system, the funds must grow to a situation in which their funding ratio is at least 95 percent.

Major reform

The pension sector has already called for the government to speed up the large-scale reform of the pension system. The reforms should make the funds less dependent on interest rate movements. FNV chairman Tuur Elzinga, among others, wants politics to move on. “Then many pension funds may already be able to index next year,” he says in De Telegraaf.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.