The latest financial report from Dutch fund ABP has revealed that its funding ratio increased five percentage points to 101% in the first quarter of 2013 from the forth quarter of 2012.

According to ABP, the increase is mainly due to an increase in the interest rate and in realised returns. The pensions rights' reduction also contributed to the recovery.

In cash terms, this means that ABP has €101 for every €100 of pension payments that it has to make. However the Dutch central bank (DNB) has instructed that the fund needs to have a minimum funding ratio of 104.2% by the end of 2013 to comply with a recovery plan.

ABP chairman Henk Brouwer said: "We're pleased that ABP's funding ratio rose by 5 percentage points in the first quarter; at last we have some good news for our participants.

"However, what is even more important for them is where ABP's funding ratio will be at the end of the year. We must have a funding ratio of 104.2% for the fund to avoid having to impose a further pension reduction. Will that happen?"

He added: "We have had a good first quarter, but there are till three to go. We're doing our best but we are very dependent on what happens in the financial markets."

The value of the liabilities fell by €3bn to €289bn in the first quarter and the available assets rose by €11bn to €292bn over the same period.

First published 18.04.2013

monique_simpson@wilmington.co.uk