The funding ratios of the Netherlands’ largest five pension funds rose by up to three percentage points in the first half of 2023 as ABP, PFZW, PMT, Bpf Bouw and PME pension funds benefited from rising equity markets.

The five pension funds made aggregate returns between 2.1% (Bpf Bouw) and 3.7% (PME) in the first half of the year as equity returns more than compensated for negative returns on non-listed real estate.

Assets of the five pension funds rose by a combined €30bn to €892bn on 30 June 2023.

Funding ratios - selected pension funds
 Q2 2023Q1 2023Q4 2022
ABP 113.6 111.9 110.9
PFZW 111.9 109.5 108.7
PMT 109.5 107.5 106.8
PME 113.5 111.5 110.4
BpfBouw 123.6 122.1 122

Of the five funds, the scheme for workers in the construction sector Bpf Bouw posted the lowest returns on equities at 7.9%, while healthcare scheme PFZW made the highest returns at 11.8%.

The double-digit returns on listed equities contrasted with sometimes severe losses on non-listed real estate of up to -6.3% (PME).

“The Dutch real estate portfolio contributed negatively to returns in the second quarter. With the exception of the retail and health portfolio, which again contributed positively to returns. The largest negative contribution to returns came from the residential portfolio,” Bpf Bouw said in a press release.

Returns - selected pension funds
 H1 2023
ABP 3.4
PFZW 3.1
PMT 3.1
PME 3.7
BpfBouw 2

As interest rates moved little in the first half of the year, returns on matching portfolios were also relatively flat, ranging from 1.3% (PME) to 2.2% (ABP).

Private equity returns were also modest, ranging from -1.8% to 2%.

This article was first published on Pensioen Pro, IPE’s Dutch sister publication. It was translated and adapted for IPE by Tjibbe Hoekstra.