Funding ratios as at 28 February 2015 are known

The funding ratio indicates whether the fund’s financial position on a certain reference date is adequate enough to pay out pensions accrued now and in the future. The higher the funding ratio, the better the fund’s financial position. A funding ratio of 100% indicates that the fund’s financial position on the reference date is adequate enough to pay out pensions that have been built up in the fund. 

 

More has changed with effect from 2015. Since interest rate fluctuations cause funding ratios to vary from one month to the next, the concept of ‘policy funding ratio’ was introduced on 1 January 2015, as one of the new rules for pension funds. 

 

The policy funding ratio is equal to the average of the funding ratios for the preceding twelve months. With effect from 2015, the policy funding ratio provides the fund with a benchmark for making policy decisions, such as determining the amount of headroom available for indexation and the adequacy of the fund’s reserves. By taking the average for the preceding twelve months, important decisions no longer hinge on the funding ratio prevailing on any given date. The policy funding ratio as at 28 February 2015 thus amounts to 130%. 

 

The pension fund publishes its funding ratios on or around the 15th day of each month. The graph below shows the situation as at ultimo February 2015. Click here to see funding ratio developments in 2014 and 2015.