Dutch pension funds delivered an average return of -2.9% in 2025, although most schemes were still able to increase pension entitlements due to a decline in liabilities, according to calculations from two pension consultants.
Bell and OverRendement based their analysis on data from approximately 160 pension funds and pooled pension funds. The results draw on figures published by pension regulator DNB last month.
Annual returns ranged from 14% for the HAL pension fund, the €166m pension scheme of the owner of FD Mediagroep (IPE’s parent company), to -14% for Pensioenfonds Zuivel, the pension fund for the dairy sector.
The -2.9% average absolute return is a weighted figure, with larger funds having a greater impact. The unweighted average stood at -2.5%, indicating that larger funds generally performed slightly worse.
Interest rate hedges
The -2.9% return in 2025 contrasts with positive returns in 2024 (8%) and 2023 (8.7%). Equities performed positively last year, with the MSCI World Index gaining 7.2% in euro terms. However, rising market interest rates weighed on performance through interest rate hedges.
“On the other hand, market interest rates rose significantly in 2025, which resulted in a negative return on the interest rate hedges,” says Jeroen Koopmans of Bell. “Having a high interest rate hedge was therefore not beneficial in 2025,” he added.
Many pension funds have increased their interest rate hedges in recent years, seeking greater protection against falling interest rates ahead of the conversion of defined benefit (DB) accruals to defined contribution (DC) capital between 2026 and 2028.
The five schemes with the lowest overall returns all had interest rate hedges above 83% at the end of 2025.
Currency and equity allocation
At the other end of the spectrum, Pensioenfonds HAL benefited from a low interest rate hedge, relatively high equity exposure and strong currency hedging. At 14%, it posted the highest return among Dutch pension funds.
Anton Kramer of OverRendement said: “HAL benefited from having little exposure to foreign currencies, because it has largely hedged its currency risk on the dollar. The MSCI World Index hedged to euro made a return of 17.2% last year.”
Company pension scheme Sagittarius followed with a return of 8.2%. Kramer noted that the fund invests solely in European equities. “Compared to the world index, that worked out well last year,” he said.
Koopmans added that the fund was likely less affected by rising rates as it is relatively mature, with a shorter duration of liabilities.
Excess return driven by liabilities
Koopmans stressed that the -2.5% average absolute return only tells part of the picture, saying: “It is also relevant what has happened to the liabilities.”
Kramer agreed: “Interest rates rose in 2025 mainly at the long end of the curve. Pension funds, therefore, saw the value of their liabilities fall, especially the funds with a long duration.”
According to Kramer, the average liability return – corresponding to the return on interest rate swaps – was 12.4%. With average asset returns of -2.9%, this resulted in an excess return of 9.6%, which funds can use for indexation.
This compares with average consumer price inflation of 3% between October 2024 and October 2025, which many pension funds use as a benchmark.
This article was first published on Pensioen Pro, IPE’s Dutch sister publication. It was translated and adapted for IPE by Tjibbe Hoekstra.
