Quarterly report Q4 2016

ABP’s financial position improves due to interest rate rise.

Highlights:

  • Current coverage ratio rises by 5.9% to 96.6% in Q4
  • Positive investment return in fourth quarter: 0.4% (€1.5 billion)
  • Return in 2016: 9.5% (€33 billion)
  • Liabilities decline in fourth quarter due to rising interest rates (€25 billion)
  • No pension reduction in 2017

Heerlen/Amsterdam, January 27, 2017. ABP’s financial position improved considerably in the fourth quarter. The current coverage ratio rose by 5.9% to 96.6%. That is well above the critical level under which pensions would have to be reduced. Consequently, pensions will not be reduced in 2017. The improved financial position is mainly attributable to interest rate movements in the fourth quarter. The increase in the interest rate reduced the liabilities by €25 billion. ABP also posted positive investment results. The Fund’s return was 9.5% in 2016, of which 0.4% in the last quarter. At the end of December, ABP had capital amounting to €382 billion.

Chairman Corien Wortmann-Kool: 'I’m very pleased that we won’t have to reduce our participants’ pensions in 2017. Although, at the same time, I should add that the chill is not out of the air yet. So it isn’t possible to promise there’ll be no reductions in the coming years. As yet, our financial position is not at the desired level. The volatility of interest rates is a determining factor in this context; a factor embedded in the current system. Added to labor market developments and the participants’ need for greater insight and choice, this reinforces my conviction that we must have the will and courage to change our pension system. ABP would like to see a move towards a personal pension with protection. I hope that together with the employers’ and employees’ organizations, as well as a new cabinet, we will be able to bring about a much-needed modernization in the interests of sustainable and good pensions for both current and future generations.'

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27-01-2017