Funding level, returns and other financial figures

 

SPF Funding level

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

February 2024

Funding level on February 29, 2024: 118.9%

Policy funding level on February 29, 2024: 122.9% 
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 pension fund’s funding level rose in February by 0.9% and amounted to 118.9% as at end February. Share markets achieved a positive return in February. Interest rates rose, which had a positive 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 positive.

Global equity markets achieved new record highs in February. Inflation eased and companies are generally showing good profit figures. Central banks are hinting at the possibility of official rate cuts later this year. Growth figures for the different economies present a mixed picture. The European Commission is gloomy about the recovery of the eurozone economy. The 2024 growth forecast has been revised downwards from 1.2% to 0.8%. Optimism is higher for the longer term as, according to the European Commission, the foundations for economic recovery remain strong. There are major differences between eurozone countries, with a weaker Germany being particularly notable. The OECD revised the United States’ growth forecast upwards by 0.6% to 2.1%. Data from China suggest increasing weakness in the Chinese economy, although the OECD’s forecasted economic growth remains unchanged at 4.7%.

The Board will continue to monitor developments closely.

Figures for quarterly development of funding level

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 Q4 2023 Q3 2023 Q2 2023 Q1 2023 2022 2021 2020 2019 2018
Funding level 117.4% 127.8% 123.1% 121.4% 120.0% 117.3% 103.3% 107.6% 107.9%
Policy funding level 123.5% 124.5% 124.6% 125.9% 125.0% 111.9% 98.4% 105.7% 113.3%
Interest 2.3% 3.1% 2.6% 2.6% 2.6% 0.6% 0.2% 0.7% 1.4%
Return up to 9.4% 4.2% 3.8% 2.5% -19.5% 6.8% 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.

Figures for annual development of variable net pension benefits

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’.