Dutch pension funds see assets fall but coverage ratios rise

OECD data for 2025 shows the Netherlands as the only member country where total pension fund assets declined, a drop attributed to costly interest‑rate risk hedging. While most advanced economies recorded asset growth, Dutch funds faced losses on bonds and on the hedges that fell in value as rates rose.

In July, Aon’s monthly Pensioenthermometer reported that the average coverage ratio of Dutch pension funds increased from 131 % to 134 %, with the policy coverage ratio moving from 128 % to 129 %. The rise in risk‑free rates reduced the present value of pension liabilities, outweighing a 1.8 % negative portfolio return. Some funds, such as PME, continued to hedge interest risk, whereas ABP chose not to, citing high costs and limited guarantees. The mixed performance highlights the tension between protecting funding ratios and preserving long‑term asset growth.