Funding ratio

The funding ratio is a percentage that provides a picture of a pension fund's financial position. It shows the relationship between the assets (specifically the pension assets) and the pensions we have to pay now and in the future (the pension commitments).

When the funding ratio is referred to by us or the media, this relates to the economic funding ratio or the policy funding ratio. Read about this month's funding ratios and the other funding ratios that we take into consideration.

Last month's funding ratio

We publish the current funding ratio on the 15th of each month. View the funding ratio for this month.

The funding ratios we use

We use five funding ratios:

  • The economic funding ratio

  • The policy funding ratio

  • The future-proof indexation funding ratio

  • The strategic required funding ratio

  • The minimum required funding ratio

Economic funding ratio

The economic funding ratio is the most recent funding ratio. We use the current rate of interest to calculate the value of the investments (the pension assets) and the liabilities (the pension commitments).

Policy funding ratio

The policy funding ratio is the average funding ratio for the past 12 months. When determining this ratio, we do not calculate the pension commitments in the same way as we do for the economic funding ratio. Instead, we use the interest rate term structure, as fixed by the Dutch Central Bank (DNB), as basis. The Dutch Central Bank (DNB) uses the policy funding ratio to work out whether a pension fund has a shortfall. The policy funding ratio is also a relevant factor for the pension fund's indexation policy and reduction policy.

The other funding ratios

The future-proof indexation funding ratio is important for our indexation policy. The strategic required funding ratio indicates whether we have a buffer that is high enough to ensure that in the following year our funding ratio will remain above 100%. The minimum required funding ratio indicates the level we do not want to go below, as otherwise we may face a funding shortfall.

History

The table below shows the monthly economic funding ratios and policy funding ratios since the start of 2017.

Economic funding ratio 2017 2018 2019
January 124% 129% 127%
February 125% 129% 128%
March 126% 127% 128%
April 124% 126% 125%
May 125% 126% 124%
June 125% 126% 125%
July 126% 127% 125%
August 126% 127% 123%
September 127% 127% 124%
October 128% 125% 125%
November 128% 126% 126%
December 128% 125%
Policy funding ratio 2017 2018 2019
January 122% 130% 129%
February 123% 130% 129%
March 123% 130% 129%
April 124% 130% 129%
May 125% 130% 129%
June 125% 130% 129%
July 126% 130% 129%
August 127% 130% 129%
September 128% 130% 129%
October 128% 130% 130%
November 129% 130% 130%
December 129% 129%

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