Financial situation

The funding ratio is an important indicator of our pension fund's financial position and shows the ratio of the money that a pension fund has (its assets) to the pensions that it is to pay, now and in the future (its liabilities). If the funding ratio is higher than 100%, the pension fund will have a buffer. If big enough, a pension fund will be able to grant (partial) supplements on pensions. However, if the funding ratio is too low, a pension fund will need to take steps to improve its funding ratio. In the worst-case scenario, it will be necessary to reduce pensions.

In recent years, our pension fund and other pension funds in the Netherlands have suffered from falling interest rates. The value of our pension commitments has increased as a result. Despite this fact, our funding ratio is still above 100%. This can largely be explained by the fact that our pension fund hedges 75% of downward interest risk, which makes us less sensitive to falling interest rates. Our funding ratio is relatively good, particularly when compared with many other Dutch pension funds. We were in a position to grant a partial supplement on pensions again too.

By law, a (partial) pension increase is only possible if we have a funding ratio of at least 110%. This ratio is the average of the last 12 monthly funding ratios. The board decides whether or not an increase will be granted on an annual basis. In December the board will decide whether or not to grant a supplement, based on the funding ratio policy at the end of October.