ABP's financial position weakened due to the corona crisis
The corona crisis is hitting ABP pension fund hard. The coverage ratio fell in the first quarter from 97,8 percent to 82 percent. Nevertheless, it does not mean that pensioners are immediately reduced to their pension.
Picture: Nanne Meulendijks
The funding ratio indicates how much capital the pension fund has in cash and what is needed to be able to pay all pensions now and in the future. “To put it bluntly: the ABP now has 82 cents in cash for every euro they have to pay in the future,” says AObpolicy advisor on pensions Roelf van der Ploeg. "That is historically low." Education and other government employees are affiliated with the fund.
Too early
According to the ABP, it is still too early to say what the consequences will be next year. For this year, pensioners do not have to worry that they will be cut. "The situation is worrisome, but it is too early to say exactly what this will mean," said ABP chairman Corien Wortmann-Kool in a press release. 'We respond where necessary, but also keep an eye on the long term in these times.
The situation is worrying, but it is too early to say what exactly this will mean
Cocktail
The corona crisis has seriously deteriorated ABP's financial position. Van der Ploeg: "It is a cocktail of low interest rates and share prices that have plummeted all over the world." However, those rates can still recover. The ABP says that the fund lost more than half of the investment profit of 2019 in this quarter.
It will not become clear what exactly it will mean until 31 December this year. “What is important is how high the funding ratio is at that moment and what the effect of the pension agreement on which the unions and employers are discussing together with Minister Koolmees is”, says Van der Ploeg. "Yet this decline is not good news for anyone."
The ABP says that it is likely that the consequences of the corona crisis will be felt for years to come.
