The financial positions of Dutch pension funds deteriorated in July, writes research agency Aon in its monthly Pension Thermometer.
The policy funding ratio, the starting point for discounts and indexation of pensions, fell from 107 percent to 106 percent. The coverage ratio is higher than the legally required minimum of 104.3%, but a number of funds are below that limit, writes Aon.
According to Aon, the average coverage ratio fell to 102 percent, from 104 percent in June. The coverage ratio indicates the extent to which the funds can meet their obligations.
The research agency expects the coverage ratio to fall even further in the coming months, because the higher coverage ratios of the second half of 2018 will then no longer be taken into account for this average.
According to the research agency, the chance of pension discounts with the bad month of July has only increased further. "With the plummet in May, the failure to rise in June and a further fall in July, discounts are becoming an increasingly realistic scenario," Aon writes.