A pension increase and falling interest rates result in a lower coverage ratio
PME has achieved a positive return of 8.65 percent for the whole of 2023. This resulted in a growth in assets by €4.89 billion to more than €54 billion. PME's coverage ratio decreased to 109.4% in the fourth quarter of 2023. This is the result of falling interest rates and the decision taken in November to increase the pensions of our participants and pensioners in January 2024.
Key figures fourth quarter 2023
- Current coverage ratio as of December 31, 2023: 109.4%
- Policy funding ratio as of December 31, 2023: 113.3%
- Investment return fourth quarter 2023: +10.11%
- Total Investment return 2023: +8.65%
- Assets increased in the fourth quarter to approximately €54.6 billion
- Pension liabilities increased in the fourth quarter to approximately €49.9 billion
Eric Uijen, chairman of the executive board: “In 2023 we were able to increase pensions for the third time in a year and a half. This time with 3.26%. That feels like a welcome change. At the same time, it has been a special year. In which interest rates that increased in the first three quarters, but showed a decline in the last quarter. In combination with the pension increase, this resulted in a lower coverage ratio. On the other hand, PME's assets have increased by almost five billion. The positive returns are back again.
It is also the year in which the Future Pensions Act (Wtp) was adopted after 14 years of consultation. Since the pension agreement in 2019, we have been working hard on the introduction of the new pension system. Naturally, we follow the current discussions surrounding the law and at the same time we prepare for the new system in accordance with the current legislation.”
Assets and pension liabilities show upward movement
PME's total assets increased in the fourth quarter from €49.53 billion at the end of the third quarter to €54.64 billion at the end of 2023. The increase in assets was largely caused by a well-performing stock market and high-yield securities, which respectively earned a 8.69% and 4.99% return. A good return was also achieved on the matching portfolio due to the falling interest rates.
PME's liabilities have increased from €41.95 billion in the third quarter to €49.97 billion at the end of 2023. The coverage ratio at the end of 2023 stands at 109.4%.
Key figures fourth quarter 2023
