Financial position

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 2026, Philips Pensioenfonds had an actual funding ratio of 126.4%. 

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 2026, Philips Pensioenfonds had a policy funding ratio of 127.0%.

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 2026, Philips Pensioenfonds had a required funding ratio of 115.4

%.
 

^{* The pension assets represent the size of the financial resources of the Pension Fund. There is a difference between pension assets and invested assets. This difference consists of a number of items (including taxes payable and social security contributions) that are included or excluded in the calculation of pension assets on the one hand and invested assets on the other. For the calculation of the funding ratio, pension assets are used}

Latest developments

In the first quarter of 2026, the funding ratio decreased from 132.7% to 126.4%, as total invested assets decreased while the provision for pension obligations increased.

Developments in the financial markets in the first quarter were dominated by the escalation of the conflict in the Middle East, which led to a sharp rise in oil and gas prices. Due to geopolitical uncertainty and the risk of a period of slower economic growth, equity markets declined. As a result, the equity portfolio delivered a negative return in the first quarter. Although the real estate portfolio generated a positive return, this was insufficient to offset the negative return on equities. Consequently, the value of the portfolio invested in risk-bearing assets decreased during the first quarter.

Government bond yields declined at the beginning of the quarter but increased again in March, as investors anticipated that sharply higher oil and gas prices would fuel inflation. Despite this slight rise in interest rates, the return on the fixed income portfolio was slightly positive. However, this modest positive return was not enough to compensate for the negative return on the portfolio of risk-bearing assets. As a result, total invested assets decreased in the first quarter.

In the first quarter, the provision for pension obligations increased. This was partly due to the inclusion of the indexation as of 1 April 2026 in the pension liabilities. As a result of the decline in total invested assets combined with the increase in the provision for pension obligations, the funding ratio declined by 6.3 percentage points in the first quarter.