Dutch pension fund assets increased 15.4% in 2012 to surpass €1 trillion for the first time, according to data released by the Dutch central bank.
According to De Nederlandsche Bank, Dutch pension assets at the end of 2012 totaled €1.01 trillion ($1.29 trillion), mainly as a result of new inflows and investment returns, according to Tobias Oudejans, DNB spokesman. In 2011, total pension assets increased 8.9%.
The average funding ratio for Dutch pension funds also improved slightly during 2012, to 102% from 101%, according to DNB data. Since then, the solvency level has increased further to about 104% as of the end of February. The funding gap narrowed mostly because of buoyant equity markets globally, which helped to increase assets. During the first two months of the year, for example, the MSCI World index added 6.6%.
At the same time, an increase in the interest rate term structure led to reduced pension liabilities.
Furthermore, regulatory changes that allowed pension funds to cut benefits also resulted in lower liabilities during 2012. However, Dutch pension funds are required to be at least 105% funded or they must agree on a recovery plan with the DNB. At the end of February, 145 pension funds reported a solvency level of less than 105%, according to the DNB.