Financial position
One of the factors used to determine the financial position of Philips Pensioenfonds is its funding ratio. If a pension fund has a funding ratio of 100%, this means that its assets exactly cover its existing pension liabilities. A series of financial rules laid down in the Financial Assessment Framework (Financieel Toetsingskader) have been used to define the following types of funding ratios:
Quarterly report
Every quarter you can read in this report how Philips Pensioenfonds is doing financially.
Quarterly report 2023 Q4 (in Dutch)Current funding ratio
The current funding ratio reflects the value of the pension fund’s assets as a proportion of the pension liabilities (all pensions payable now and in the future).
At 31 March 2024, Philips Pensioenfonds had an actual funding ratio of 123.3%.
Policy funding ratio
Another way of calculating the funding ratio that is less subject to daily fluctuations is the policy funding ratio. The policy funding ratio is calculated by taking the average of the actual funding ratios over the past twelve months. By law, pension funds are required to use their policy funding ratio for deciding on various matters, for example indexation. The policy funding ratio is also used for other purposes, including to establish whether the pension fund’s buffers are sufficient.
At 31 March 2024, Philips Pensioenfonds had a policy funding ratio of 126.1%.
Required funding ratio
The required funding ratio is the minimum policy funding ratio that pension funds are required to have according to the law. If a pension fund’s policy funding ratio is at the same level as the required funding ratio, this means that it has the financial buffer required by law. The purpose of this buffer is to compensate for fluctuations in the value of the pension fund’s investments and liabilities. The required funding ratio varies from one pension fund to the next, and is determined largely by the pension fund’s investment policy: the higher the risks in the investment policy, the higher the required funding ratio.
At 31 March 2024, Philips Pensioenfonds had a required funding ratio of 115.2%.
| Amounts in millions of euros | ||||
| End of Q1 2024 | End of Q4 2023 | End of Q3 2023 | End of Q2 2023 | |
| Pension fund's assets | 18,270 | 18,157 | 16,558 | 17,725 |
| Pension liabilities | 14,816 | 14,506 | 12,941 | 14,009 |
| Current funding ratio | 123.3% | 125.2% | 128.0% | 126.5% |
| Policy funding ratio | 126.1% | 127.1% | 128.0% | 128.3% |
Latest developments
In the first quarter of 2024, the current funding ratio fell from 125.2% at the end of December 2023 to 123.3% at the end of March 2024. In the first quarter of this year, the interest rate on government bonds rose. Due to this increase in interest rates, the return on the fixed-income portfolio was negative. On balance, the portfolio with commercial assets made a positive return: the good economic developments in the United States together with positive corporate results resulted in a positive return on the equity portfolio that was greater than the negative return on the real estate portfolio. The increase in the value of the portfolio with commercial securities was greater than the decrease in the portfolio with fixed-income securities. As a result, the return on the total portfolio was slightly positive in the first quarter.
At the end of March, the indexation of 1 April 2024 was incorporated into the pension liabilities. This is mainly why pension liabilities increased. Because the increase in pension liabilities was greater than the increase in total invested assets, the current funding ratio fell by 1.9 percentage points in the first quarter.
Related information
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Indexation policy
We try to increase your pension every year. This is called 'indexation'. But indexation cannot be taken for granted. Do you want to know more about our indexation policy?
Go to Indexation policy
Funding ratio
This graph gives you an idea of the financial health of Philips Pensioenfonds.
Go to graph