The funding level and the policy funding level are published around the 10th working day of each month.
Funding level on October 31, 2024: 118.1%
Policy funding level on October 31, 2024: 120.4%
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 pension fund’s funding level decreased by 2.5 percentage points in October and amounted to 118.1% as at end October. During October, equity markets achieved a negative return. Interest rates and the interest rate swap fell, which had a negative effect on the funding level due to the fact that the pension fund hedges part of the interest rate risk. On balance, the funding level result was negative.
After an initial rise during October, a stock market reversal emerged in the last week of October. Uncertainty regarding the outcome of the US elections and rising state and other interest rates resulted in share prices falling at the end of October, with the month still ending in the red. Rising state and other interest rates are also resulting in negative returns in the pension fund’s bond portfolio. The so-called swap spread fell sharply, ultimately causing interest rates against which the pension fund’s technical reserves are discounted to fall during the month, resulting in an increase in the value of the technical reserves.
In terms of economic developments in Europe, the situation remains difficult. While several leading indicators demonstrated a slight recovery, the indicators still signal weakening growth. Inflation is falling, with this being below 2% (1.7%) in September. Core inflation, however, which excludes energy and food prices, still remains high (2.7%). The European Central Bank again reduced key interest rates by 25 basis points to 3.25%. This is the third reduction this year. With inflation falling, the central bank will have space to reduce key interest rates with the aim of supporting Europe’s ailing economy.
The Board will continue to monitor developments closely.
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.
| Position at the end | Q3 2024 | Q2 2024 | Q1 2024 | 2023 | 2022 | 2021 | 2020 | 2019 |
| Funding level | 120.6% | 121.7% | 119.1% | 117.4% | 120.0% | 117.3% | 103.3% | 107.6% |
| Policy funding level | 121.0% | 122.3% | 122.7% | 123.5% | 125.0% | 111.9% | 98.4% | 105.7% |
| Acturial interest rate | 2.3% | 2.6% | 2.4% | 2.3% | 2.6% | 0.6% | 0.2% | 0.7% |
| Annual return | 6.2% | 0.7% | 1.7% | 9.4% | -19.5% | 6.8% | 6.5% | 16.9% |
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.
The variable net pension benefit is adjusted annually at the beginning of the year on the basis of the result achieved in the previous year. This result includes the return on investments, the development of market interest rates, and the result on death within the group of pensioners who have a variable net pension benefit.
| As the end of | 2023 | 2022 | 2021 | 2020 |
| Funding level | 99.93% | 103.96% | 111.27% | 104.67% |
| Result | -0.07% | +3.96% | +11.27% | +4.67% |
| Average interest rate | 2.50% | 2.90% | 0.45% | 0.00% |
| Return | 8.94% | -23.22% | 3.15% | 8.14% |
The total result achieved for the group in 2023 is -0.07%. Despite the positive return on investments over 2023, this (small) negative result is largely due to the decrease in interest rates in 2023. As a result, SPF needs to reserve more money to pay future variable net pension benefits.
SPF divides the result achieved over five years. As a result, the reduction of the variable net pension benefit over 2024 to 2028 inclusive is equal to 0.02% per year.
For more information, please see the brochure 'Indexation’.