Quarterly report Q1 2015

Funding ratio declines in spite of good returns. 2016 pension indexation virtually impossible

Highlights:

  • Policy funding ratio 102.6%; (Nominal) current funding ratio 96.4%;
  • Return 8.8%, available assets € 373 billion
  • Pension reduction highly improbable, indexation virtually impossible

Heerlen, April 17, 2015. ABP’s policy funding ratio declined by 2.1 percentage points in relation to its position at the end of the fourth quarter 2014 to reach 102.6% at the end of the first quarter 2015. As a result of the positive returns (+8.8%) achieved by ABP on its investments, available assets rose by € 29 billion this quarter.

Chairman Corien Wortmann-Kool: 'ABP achieved a good investment result in the first quarter. Assets increased by over € 29 billion this quarter. However, the low interest and discount rates and the implementation of the nFTK (new Financial Assessment Framework) have increased our liabilities (all current and future pensions) by € 47 billion. This has caused the policy funding ratio to drop to 102.6%. We expect the low interest rates, and therefore the low discount rates, to persist for the time being as a result of which the policy funding ratio is expected to continue to drop over the course of the year. Currently it looks like we will not be able to adjust pensions for inflation in 2016. Fortunately, current expectations are that we do not need to reduce pensions next year either. A key advantage of the new FTK is that any future reductions can be spread over time.'

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16-04-2015