New Year's message Board APF Pension Fund
We would like to wish all our (former) participants and pensioners a prosperous and happy new year. After the exceptional pandemic year of 2020 we briefly look back on the previous year and look towards the future.
The year started off well for APF Pension Fund, but this suddenly took a turn when in March we were faced with the pandemic’s consequences on financial markets. The (current) funding ratio fell below our critical funding ratio level of approximately 90%. As of that moment we were in crisis and our policy was primarily aimed at preventing (accrued) pensions to be decreased. This aim was achieved, for which we are thankful. Ultimately, the recovery that took place in the fourth quarter ensured that the year could be finalised with a funding ratio of 101% (provisional figure) and that we achieved positive investment results. In spite of the investment returns achieved the current funding ratio decreased compared to the end of 2019 (by approximately 5% points) due to a drop in interest rates. We will communicate the exact figures at a later stage.
Nevertheless, 2020 turned out to be a very difficult year, especially for those finding themselves in lockdown (voluntary or otherwise) and possibly becoming socially isolated. Including for young people not being able to go to school and having to do without essential social contacts. We have all been able to see from the media the severe impact on the care system, whether or not Covid-19 related, which is still felt today. Last but not least, we have lost a great number of loved ones. Unfortunately, there was a greater number of deaths among pensioners in our APF community as well in comparison with recent years. Although we have no clear understanding of the causes of death, Covid-19 probably played a role.
What will 2021 be like?
Although we are still in the midst of the second Covid-19 wave, there seems to be some light at the end of the tunnel, thanks to the start of vaccination programmes. We realize, however, that this may take a substantial number of months. But we do perceive more optimism in financial markets and see clear signs of more geopolitical stabilisation. So there is a sound basis for recovery towards a more normal situation, but considerable uncertainties remain however. It is yet unknown how unemployment will develop after the expiry of various large scale government support programmes and whether these programmes will result in inflation in the long term. So we will continue to work towards improving our results, but are not able to make any predictions about them.
One thing is for sure: our agreements with employers and with Achmea Pension Services have been successfully extended by 3 years. We will use this 3 year period to develop a new future proof pension plan, in close consultation with all parties involved, in line with the Pension agreement, which was recently elaborated in greater detail. To this end, as soon as possible we will start consultations with social partners, who as a first step have to make a choice for a future pension plan. After that the pension fund will consider whether a balanced transition for all participants can be achieved.
Once again, we will do our utmost for you this year and will keep you informed.