In this blog, we would like to inform you about the impact of developments on the financial markets on the financial position of the pension fund, as well as about the accessibility of the pension fund during these times.

Decrease in funding ratio due to coronavirus

In recent days, stock prices have fallen sharply due to fears of a global economic crisis. This fear is caused by the consequences of the coronavirus. It has also led to a further decline in interest rates, as investors are seeking safety in relatively secure government bonds. The increased demand for government bonds has caused interest rates to drop.

What exactly causes the decline in the funding ratio?

Interest rates and the value of the investments affect the policy funding ratio. The funding ratio reflects the relationship between the value of the pension fund’s investments on the one hand and the value of its pension liabilities on the other. Due to the recent significant decline in stock markets, the assets of the pension fund have decreased. At the same time, interest rates have fallen, which has increased the value of the pension liabilities. When interest rates are lower, more assets must be set aside now in order to meet future pension obligations.

Will my pension be reduced?

The policy funding ratio as of December 31 determines whether pensions need to be reduced (cut). The policy funding ratio is the average of the actual funding ratios over the past 12 months. This means that one or several bad investment months could be offset by other months. At this moment, no reductions are being made. Whether this will be different on December 31, 2020 will have to be assessed at that time.

Accessibility of the pension fund

The administrative organization of the HPF has taken measures to ensure the continuity of its operations and, therefore, the implementation of the pension scheme. This ensures that the key elements of the operations can continue, even if the continuity of staffing at the administrative organization becomes an issue. We are following the government’s advice and are working from home as much as possible. Therefore, we are not available by phone, and visits are not possible. However, you can reach us by email. Our email address is pensioenfonds@heineken.nl.

The Heineken Pensioenfonds