Funding level

 

SPF Funding level

The funding level and the policy funding level are published around the 10th working day of each month.

June 2021

Funding level on June 30, 2021: 113.2%

Policy funding level on June 30, 2021: 104.9% 
The policy funding level is used to make decisions on indexation. The policy funding level is the average of the last twelve months of funding levels. 
Click here for more information about the monthly development of the funding level.

Funding level evolution
The funding level of the pension fund rose by 0.7 percentage points to 113.2% in June. During June, share markets achieved a positive return and interest rates also fell. The positive return on shares was the main reason for the positive development in the funding level during June. 

The economic recovery is continuing. A number of sentiment indicators are showing improvements. For example, European consumer confidence is continues to grow. The upward trend in shares continues. As of mid-June, the upward trajectory was subject to a minor correction when the central bank of the United States implied that interest-rate rises might follow in 2023 if inflation continues to rise. However, signals from central banks that they will maintain an expansionary (loose) monetary policy as well as the expectation that the increased inflation would be of a temporary nature ensured that the upward trend in equities resumed a number of days later. 

The combination of an expansionary (loose) monetary policy and progress on vaccinations paints a positive picture for further economic recovery. However, extreme monetary policy and high budget deficits continue to be a longer-term risk. 

There are still considerable market uncertainties. The number of coronavirus infections initially decreased significantly, but this number has been rising recently as a result of the easing of restrictions and the more contagious Delta variant of the coronavirus. At present this has not impacted financial markets. The Board will continue to monitor developments closely.

Quarterly development

The table below shows the quarterly funding levels in previous years. The table also shows the interest rate we are obliged operate (the market interest) and the returns.
The quarterly funding level is adjusted a few weeks before the end of each quarter. 

As at end of Q1 2021 2020 2019 2018
Funding level 110.6% 103.3% 107.6% 107.9%
Policy funding level 100.5% 98.4% 105.7% 113.3%
Interest 0.5% 0.2% 0.7% 1.4%
Max. yield 0.0% 6.5% 16.9% -2.8%

See the menu on the right of the screen for more information about the financial developments.

The funding level is an important yardstick for judging the pension fund’s financial situation. This shows the relationship between SPF’s pension assets and SPF’s pension obligations, both now and in the future. If the funding level is 110%, for example, then for every €100 SPF pays to pensioners (among others), SPF has €110 worth of assets at that time.