Civil service scheme ABP and technology industry fund PME reported lower funding ratios in the first quarter of 2026, reflecting a slight fall in interest rates and weaker equity markets.
The funding ratio of €60.3bn PME declined from 123.5% at the start of the year to 119.1% at the end of March.
“In the past quarter, the world has been confronted with rapid geopolitical shifts. The war raging between the US, Israel and Iran, resulting in the blockade of the Strait of Hormuz, has led to uncertainty in financial markets,” said the fund’s president Alae Laghrich.
Laghrich noted that current volatility could also support a rapid recovery.
“At the time of publication of this report, our funding ratio has already risen back to approximately 125%,” he said. Equity markets rebounded in April after recording significant losses in March.
The main driver of PME’s funding ratio decline was lower interest rates, which increased the value of liabilities. In response, the scheme raised its interest rate hedge from 70% to 79% of liabilities.
“In this way, we prevent the pensions of our participants from becoming unnecessarily vulnerable to the whims of global markets just before the transition to the new pension system,” said Laghrich.
PME is due to convert defined benefit (DB) accruals to a defined contribution (DC) arrangement on 1 January 2027.
ABP, the only other one of the five largest Dutch pension funds yet to transition to the new system, also reported a decline in its funding ratio, from 123.5% to 119.1%. The scheme posted a -5.8% return on listed equities, while private equity, commodities, infrastructure and real estate delivered positive returns.
PFZW, PMT and bpf bouw delay Q1 updates
PFZW, PMT and bpf bouw, which transitioned to DC arrangements on 1 January 2026, have delayed publication of their first-quarter investment updates as they adapt reporting to the new system.
According to a spokesperson for metals industry scheme PMT, it is “quite a puzzle” to communicate investment results clearly in the new arrangement.
“It’s not as simple as publishing a funding ratio. And publishing the total return is not suitable either, as you would be comparing apples with oranges. After all, each fund invests differently for different age groups,” she said.
PFZW and bpf bouw cited similar reasons for the delay. All three funds are expected to publish updates next month.
