Big funds doing well on new pension system; Expect modest pension increase next year

Pensioners of the major pension funds that have already switched to the new pension system may be able to look forward to a modest pension increase next year. Thanks to positive returns, Pensioenfonds Zorg en Welzijn (PFZW), Pensioenfonds Metaal en Techniek (PMT), and bpfBOUW clearly improved their financial situation in the second quarter.

According to preliminary estimates by healthcare fund PFZW and construction fund bpfBOUW, benefits can be increased by approximately 0.6 percent. Based on the financial situations as of the end of June, metal fund PMT anticipates an increase of 0.5 percent.

This is only an indication or snapshot. The actual consequences for pension benefits in 2027 will not be determined until the figures as of the end of September.

In the first quarter, the funds still faced significant difficulties due to the war in the Middle East and falling interest rates. As a result, the pension accrual of millions of participants suffered losses.

Financially, the funds performed significantly better in the second quarter. This is primarily due to recent record highs on the stock markets, partly driven by investors’ massive enthusiasm for artificial intelligence. As a result, tech companies and chip stocks have risen sharply in value. Stock market unrest regarding the war in the Middle East also subsided somewhat.

"Investment results for this quarter are positive, with equity returns in particular standing out," said Caspar Vlaar, chairman representing employees and pensioners at PMT. "With this, the negative impact from the first quarter has largely been recovered for most participants. The differences between the first and second quarters clearly show that these results are snapshots."

Due to the transition to the new pension system, pensions at the three major funds rose sharply at the start of this year. This was partly because part of the buffer was distributed at the time. Such a large increase seems unlikely next year.

Of the major funds, civil servants' and teachers' pension fund ABP and metalworking fund PME have not yet transitioned to the new system. They already released their quarterly reports last month. ABP, the largest fund in the Netherlands, hinted that participants may soon get an additional pension increase. ABP is transitioning to the new system at the upcoming turn of the year.