The funding level is an important yardstick for judging the pension fund’s financial situation. It indicates to what extent the pension assets are sufficient to meet all future pension obligations, in particular the pension benefits. The funding level was 106.8% at the end of 2016, having been at 108.4% at the start of the year.
Besides the funding level, a pension fund must calculate the ‘policy funding level,’ being the average of the last twelve months of monthly funding levels. The policy funding level can be used to determine whether a pension fund has a shortfall and must therefore submit a recovery plan to De Nederlandsche Bank (the Dutch national bank). The recovery plan outlines how a pension fund aims to achieve a higher funding level in the coming years. The policy funding level can be used to determine whether a pension fund needs to curtail accrued pensions and benefit payments. Based on the policy funding level, no curtailments were necessary in 2016.
The policy funding level plays a decisive role in the fund's decisions on whether to index. It was at 102.0% at the end of 2016. Partial indexation may only be applied if the policy funding level exceeds 110%.
SPF was required to draft a recovery plan at the beginning of 2016. You can view a summary of the plan on our website. This plan was based on the financial situation at the beginning of 2016.