Quarterly report Q3 2016
ABP’s coverage ratio approximately at the same level for the last three quarters
- Current coverage ratio virtually unchanged at: 90.7%
- Positive return in third quarter: 2.7% (€9.8 billion)
- Liabilities rise in third quarter due to declining interest rates (€9 billion)
- Reduction in pensions in 2017 remains a possibility
Heerlen/Amsterdam, October 20, 2016. ABP’s financial position continued to be stable in the third quarter. The current coverage ratio rose slightly to 90.7% and at the end of the third quarter was approximately the same as it was at the end of the first two quarters. ABP posted a positive investment return of €9.8 billion in the third quarter. However, liabilities also rose by €9 billion. At the end of September, ABP had capital amounting to €381 billion.
Chairman Corien Wortmann-Kool: ‘Our coverage ratio has been stable over the three quarters of 2016: just above 90%. If we can maintain this in the fourth quarter, we will not be forced to reduce pensions in 2017. To be able to maintain or improve this coverage ratio, it is especially important that interest rates do not drop any further, because that would increase pension liabilities. And we need to continue to post positive returns. Up to the end of this quarter, we succeeded in doing so: with our investments, we earned over €30 billion (9%) for our participants in 2016. The coming months are therefore going to be critical. In part, because the need to reduce pensions continues to be an ever-present possibility. Once we prepare our balance sheet in January, we will be in a position to indicate whether or not we will be forced to implement a (limited) pension reduction.’