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Dutch pensions funds' recovery remains 'fragile', Aon Hewitt warns

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Average funding at Dutch pension funds has fallen by 1 percentage point to 109% in March, according to figures from Aon Hewitt. 

Mercer, meanwhile, has estimated a coverage ratio drop of 0.5 percentage points to 110.5%

Dennis van Ek, principal and actuary at Mercer, attributed the differing outcome chiefly to the fact it based its calculations on the official figures of supervisor De Nederlandsche Bank, which equated to an average funding of 111% at February-end.

Aon Hewitt pointed out that the funding decrease has been caused by falling long-term interest rates, which led to a 1.5% increase in pension funds’ liabilities.

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Frank Driessen, Aon Hewitt’s chief commercial officer for retirement and financial management, said Dutch pension funds’ recoveries remained fragile.

He pointed out that the average funding had not further improved this year.

Previously, the consultancy concluded that the average coverage ratio at the end of February was 110%, the same level of the previous month.

Aon Hewitt also noted that Dutch schemes’ average assets increased by 0.6% on balance in March, following a 0.9% increase in fixed income holdings.

Equity holdings returned 0.8% last month, while indirect property generated a 0.9% loss.

Mercer estimated that the average Dutch scheme’s funding increased by just 0.6 percentage points over the first three months of this year.

It reported quarterly returns of 7% and 5%, respectively, for commodities and long-term fixed income investments.

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