Pension funds in a slightly worse financial position than one month ago

Pension funds are in a slightly worse financial position than a month ago, concludes Aon consultancy. This was mainly because August was generally a bad month for equity investments. Interest rates actually rose, which has a favorable effect on the calculation of pension funds' liabilities.

On average, Dutch pension funds had 1.21 euros in cash for every euro in pensions committed in August. In July, this figure was still 1.22 euros.

Equities in emerging markets fell the most, with the problems of the Chinese economy in particular causing losses. Some large real estate groups in China have long been threatened with bankruptcy because they have become heavily indebted during the years in which they grew rapidly with the help of many loans. The crisis is also dampening consumer confidence in the country.

Meanwhile, according to Frank Andriessen, head of Aon's asset management division, Dutch pension funds are working hard to adapt to the new pension law.

Indeed, employees and employers must have reached agreements on the transition to the new pension system by January 1, 2025. Six months later, pension funds must already have a plan in place to implement new pension contracts.

"Because January 1, 2025, has remained intact, we see that it squeaks and creaks," says Andriessen. "It is therefore important to keep a good balance and to work out a plan B in case things go wrong."

"Because the Jan. 1, 2025 deadline has not been touched, we see that it squeaks and creaks," Andriessen says. "So it's important to keep a good balance and come up with a Plan B in case things go wrong."

The pension law recently passed by the Senate makes pensions less secure. They can be increased earlier in good economic times, but they can also be cut in bad times. To adapt to the new rules, pension funds have a lot of work ahead of them, he says.