What is the current funding ratio?

Also known as market value funding ratio. This is a measure that indicates the extent to which a pension fund is capable of meeting its future obligations, based on the current market value of the assets and liabilities. The current funding ratio is calculated based on the interest rate term structure (RTS), which is periodically published by De Nederlandsche Bank (DNB).

A funding ratio of 100% means that the pension fund has exactly sufficient resources to meet all its obligations. A lower funding ratio indicates a shortfall, while a higher funding ratio indicates a surplus. This measure is essential for assessing the financial health of a pension fund and may influence decisions regarding premiums, indexation, or even reductions in pension benefits.

Comparable terms are the economic funding ratio and the policy funding ratio, each of which employs a different methodology or long-term perspective for calculating the funding ratio. To fully understand this term, it is important to know the context of the legal requirements and market conditions in which it is applied.