In the fourth quarter of 2024, Dutch pension funds saw their funding ratios decline relative to the third quarter, as the value of their liabilities increased more than the value of their investments. Total investments went up by €20 billion to €1,686 billion, while aggregate liabilities rose by €45 billion to €1,451 billion. One of the factors behind the growth in liabilities is the fact that they incorporate indexation for 2025. The funding ratio reflects a pension fund’s current financial position, expressing the ratio between investments and liabilities.
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The Dutch pension sector’s average funding ratio came to 116.2%. This represents a 2.1 percentage point decrease from the previous quarter (see Figure 1). This puts it above the figure for a year ago, which was 114.6%. This is due to the positive return on variable-yield investments. On balance, its effect outstrips the negative effects of the fall in interest rates and the indexation granted.
This represents a 0.5 percentage point decrease from the previous quarter. The policy funding ratio is the average of the funding ratios for the past twelve months. It fell because the average funding ratio in the fourth quarter of 2024 was lower than that in the corresponding quarter of 2023.
We used the following statistics to compile this news release:
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