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Financial position strengthened further

Financial situation
Published on:

In the third quarter of 2023, PME's financial position was strengthened further. The current funding ratio increased from 113.5% at the end of June to 118.1% at the end of September. In the past quarter, rising interest rates amply compensated for a negative investment return. 

Key figures Q3 2023

  • Current funding ratio as at 30 September 2023: 118.1%
  • Policy funding ratio as at 30 September 2023: 113.2%
  • Investment return Q3 2023: -/- 4.85%
  • Capital decreased to approx. €49.5 billion in Q3 2023
  • Pension commitments decreased to approx. €42 billion in Q3 2023

Eric Uijen, chairman of the executive board: “A troubled world full of conflict comes with a troubled economy. This is reflected in our investment returns, which were slightly positive during the first two quarters of this year, but negative in Q3. The sharp rise in interest rates in particular resulted in significantly negative returns on our fixed-interest securities. At the same time, rising interest rates mean that we need to set aside less money for current and future pensions. This meant that, on balance, our financial health again improved. In these uncertain times, that's a ray of hope for our participants and pensioners. A healthy financial position also helps us make a smooth transition to the new pension scheme.”

Commitments decrease more sharply than capital

In Q3 2023, PME's invested capital decreased to €49.5 billion. This decrease is caused mainly by negative returns on both the matching and return portfolios. Only private equity and alternative investments showed positive returns in this past quarter. In Q3, increasing interest rates (from 2.55% to 3.09%) caused a substantial decrease in pension commitments. On balance, this improved PME's financial position, resulting in a current funding ratio of 118.1% as at the end of September 2023. 

Key figures Q3 2023