APF Pension Fund draws up a new recovery plan
Every year, the APF Pension Fund checks whether its equity capital still meets the legal requirements. There was a collateral deficit at the end of last year. That is why we have submitted a new recovery plan to the supervisor, De Nederlandsche Bank.
The fact that our policy funding ratio was 96,0% at the end of 2020 necessitated this recovery plan. The policy funding ratio was below the required level of 116,5%. The recovery plan must demonstrate that the pension fund’s financial situation is likely to recover sufficiently within 10 years, thus removing the deficit.
What is in the recovery plan?
This year’s recovery plan mentions that recovery is to be expected in 2026. In last year’s recovery plan a recovery expectancy was mentioned at the end of 2023. This is still about 5 years, because we need more time to raise the funding ratio to the legally required level. This is still well within the maximum term of 10 years, however.
The current funding ratio
The current funding ratio shows the financial situation of APF Pension Fund on a monthly basis. This funding ratio can fluctuate significantly and immediately shows the consequences of financial developments, for instance of the current corona crisis. A critical limit (90%) applies to the current funding ratio level. Our current funding ratio must be above 90% at the end of 2021, and this will prevent the need for additional measures in 2022. These measures are described in the financial crisis plan ('financieel crisisplan', only available in Dutch).