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Coverage ratio

The coverage ratio reflects the fund's financial health. It reflects the relation between PME's assets and the amount needed to cover the cost of all pensions - both now and in the future. Every month we report about our financial position. The coverage ratio determines whether the pensions can be increased or must be cut.

Financial position PME end of June 2024

The most recent coverage ratio at the end of June is 114.8%. That is 0.7% higher than the previous month. At the end of the year, the policy coverage ratio determines whether we can increase or have to cut your pension.

Our policy coverage ratio is 113,5%

Coverage ratio higher than 105% (Current situation)

Coverage ratio between 90% and 105%

Coverage ratio below 90%

What do these coverage ratios mean?

The (current) coverage ratio indicates each month the relation between the fund's assets and the pension payment obligations. The pension payment obligations represent the amount needed to pay out all pensions, both now and in the future. If the coverage ratio is 100%, this means that there is exactly enough money to pay out all pensions.

The policy coverage ratio is the average coverage ratio of the past 12 months. It, therefore, shows the pension fund's financial position over a longer term.

The coverage ratios in the past 12 months

July 2023113%115,8%
August 2023112,9%115,3%
September 2023113,2%118,1%
October 2023113,2%116,6%
November 2023113,4%111,7%
December 2023113,3%109,4%
January 2024113,4%110,2%
February 2024113,2%111,8%
March 2024113,3%111,7%
April 2024113,3%112,7%
May 2024113,4%114,1%
June 2024113,5%114,8%

What is legally required of us?

We are required to have extra reserves in order to weather financial storms. This is an extra buffer. We call this buffer the required equity. This mandatory extra buffer is linked to the required coverage ratio. The required coverage ratio varies for each pension fund, as laid down by the law. We have sufficient buffers when our coverage ratio reaches 120.3%.

What if the policy coverage ratio drops below the required coverage ratio of 120.3%? In that case we must submit a recovery plan with De Nederlandsche Bank. In that recovery plan we explain how we plan to restore the coverage rate to 120.3% within 10 years.

Prepared for possible crisis with our crisis plan

We have a financial crisis plan (pdf, in Dutch) to be prepared for a potential crisis, for instance if the coverage ratio drops so low that the pensions are at risk. Every pension fund is required to have a financial crisis plan.

More information