Looking ahead to 2023

The War in Ukraine

The war in Ukraine is, unfortunately, still ongoing. This means that uncertainties remain on many fronts. What will be the consequences for fuel prices, particularly gas? What will be the consequences of sanctions imposed by Western countries on Russia? To what extent will Western economies be affected by the measures against Russia and Russia’s allies? For 2023, it is and remains difficult to predict how the economy will develop and what this will mean for SPF policies. The fund will keep a careful watch on this. At the same time, the Board decided to adhere to its long-term policy for now, due to the uncertainties and unpredictability of the current crisis. 



Continued high inflation remains another point of concern. Central banks pursued very strong economic stimulus policies until early 2022, which led to inflation rises in Europe in late 2021 and early 2022. The war in Ukraine added to that. In mid-2022, the ECB started increasing interest rates, as did all other financial regulators across the world. Will these interest rate hikes be enough to curb inflation in and beyond 2023? Interest rate hikes are not an immediate remedy; they take time to have an effect. Moreover, the end of the war in Ukraine is not yet in sight. 


Banking Sector

The American Silicon Valley Bank (SVB) went bankrupt in the second week of March 2023, collapsing in a textbook case of a ‘bank run’. As a consequence of major losses in the bond portfolio, caused by increases in interest rates, the SVB was forced to issue new shares. Customers lost confidence in the bank and withdrew their assets en masse. The consequence was considerable turmoil in the banking sector and a sharp fall in bank shares.

Credit Suisse also got into difficulties in that same month. Following a bailout attempt by the Swiss Central Bank, Credit Suisse was acquired by UBS. More small banks came under pressure in the United States, which is why major American banks decided on a joint capital injection. 

SPF had no shares in the banks that filed for bankruptcy. Exposure to Credit Suisse in the investment portfolio was minimal. The direct impact on the pension fund portfolio was, therefore, limited. The pension fund was, however, affected by falling bank shares prices. 


Future Pensions Act

The Board expects 2023 to be an important year as we move toward a new pension system. The core of the Future Pensions Act (Wet toekomst pensioenen, Wtp) is a transition to a contribution scheme. The new contract no longer primarily focuses on a ‘fixed’ pension payment that increases with inflation, which is an ambition that has proved to be not entirely feasible for many years. The pension payment will become more variable. This offers less assurance for members and pensioners, and SPF can also increase pensions earlier. On the other hand, negative results also increase the likelihood of pension cuts. The accrual of pension will now take place via personal pension capital. 


The relevant bill was sent to the Senate before the spring. What the Future Pensions Act will mean for SPF and its members, deferred members, and pensioners will become clearer in the near future as social partners start making concrete choices. 


The Pension Scheme Until the Point of Transition

The agreements the social partners made about the current pension scheme end on December 31, 2023. It is then up to all parties to make new agreements regarding the period up to the transition date. The planned date is January 1, 2026. It is possible that the agreements will need to apply for a period of two years. The level of the contribution and the accrual rate will be central in this. The Board will need to make agreements on this with the social partners. Much will depend on the interest rates at the end of 2023.  


Guiding Choices

Another important element of the Future Pensions Act is the tightening of pension funds’ duty of care. In that context, pension administrators must ensure that they provide good information to members so that they can make considered choices. Effective communication with members is the key to success.


Financial Position

 he funding level increased slightly in early 2023, partly due to interest rate increases. The funding level was 121.4% by end March and the policy funding level stood at 125.9%. 


Sustainability Policy

The sustainability policy will again be an important agenda item for the Board in 2023. Examples of actions mentioned by the Board with respect to sustainability in 2023 are: 

  • Evaluating and, if necessary, expanding the exclusion policy for countries and companies based on the fund’s sustainability ambition and the preferences indicated by members in the 2022 member survey;
  • Defining policy for when an engagement process with a company does not deliver the required results; 
  • Setting a carbon reduction target;
  • Defining the Sustainable Development Goals (SDGs) on which the fund aims to focus;
  • Investigating allocation options for the focus SDGs within the investment portfolio;
  • Continuing to implement the requirements from the Sustainable Finance Disclosure Regulation;
  • Increasing support for sustainable and responsible investment among members by reporting more on our sustainability activities and results.


Communications Policy from 2023 to 2025

The Board decided to maintain the existing communications policy for the 2023 to 2025 period. The new pension system will be an important focus point in communications. Now that the Dutch House of Representatives has adopted the Future Pensions Act and the social partners have determined the contours of the new scheme, SPF can also take its responsibility. During the course of 2023, the fund produced a communications plan for the new pension scheme with concrete actions with respect to the various SPF target groups. 


Service Level Agreement

SPF signed a new Service Level Agreement (DVO) with DPS in early 2023. The Service Level Agreement further specifies the existing agreements and reviewed these for completeness where necessary. Indeed, the fund is committed to ensuring that DPS remains available to deliver comprehensive and high-quality services in the years to come. 


Pension Administration

With DSM opting to distance DPS from the company, it is important that a future shareholder also respects the agreements made by SPF and DPS in the Service Level Agreement. SPF is closely monitoring ongoing developments. The Board will take action to safeguard SPF’s interests, should this be necessary.