Annual report 2017
ABP's financial position has improved; pension prospects remain unchanged
- Current coverage ratio rose from 96.7% to 104.4% in 2017
- Policy coverage ratio rose by almost 10 percentage points to 101.5% last year
- Investment return in 2017: 7.6% (+€28.7 billion)
- Liabilities continued to be high due to low interest rates
Heerlen/Amsterdam, January 25, 2018. The fund's financial situation improved in 2017 and coverage ratios rose. The level attained is not sufficient to increase member pension benefits. The coverage ratios primarily rose due to the 7.6% return on investments. In 2017, assets increased by €27 billion, and at year-end amounted to €409 billion. 2017 also was a year in which social partners, supported by funds such as ABP, worked hard on a new pension system, as yet without any concrete results.
Chairman Corien Wortmann-Kool: 'The Dutch economy is improving; many people are a little better off. Unfortunately this does not apply to our participants: pension prospects stayed unchanged. ABP had a good investments year and assets grew by €27 billion. However, due to persistently low interest rates, liabilities stayed very high. In all likelihood we will not be able to increase pensions much, if at all, in the coming five years. This is because under the current system, we must build up a €100 billion buffer before we can even begin to think about full indexation. Over the short term, i.e., 2018 and 2019, the likelihood of having to lower pensions is slight. However, over the medium term there continues to be a possibility that pensions will have to be lowered. Although ABP's financial position has improved, modernization of the pension system continues to be important. Because the labor market has changed, participants have different needs and the current system is too dependent on interest rates. I sincerely hope that the political establishment and social partners will provide clarity about a renewed system over the coming months.'