Forward financial situation at the end of 2023
In 2023 Forward achieved a return on its investments of more than 8%. As a result, assets increased to more than half a billion euros. But obligations rose sharply too. On balance the financial situation improved.
In this article you can read more about the financial developments at Forward in 2023.
The figures for 31 December are provisional year-end figures. The final figures will be published in the annual report before the summer.
Initial review of 2023
Forward achieved a provisional return of 8.1% for 2023 as a whole. As a result of this and contributions received, assets rose to €560 million.
You will find information about how the total return was achieved under Investing.
It is not just newly accrued pensions that play a part in determining obligations. The interest rate is also a major factor. In 2023 the initially low interest rate (2.23%) rose steadily, leading to a sharp fall in Forward’s obligations; when the interest rate is high, pension funds need less money to pay all pensions, now and into the distant future.
In the final quarter however the interest rate fell sharply again, to below the level at which the year began (2.15%). This meant that the sharply fallen obligations increased again at the end of the year.
The initial fall in obligations during 2023 had a favourable effect on the coverage ratio. However, as a result of the sudden increase at the end of the year, the current coverage ratio on 31 December was approximately at the same level as at the start of the year. The policy coverage ratio – that is the average coverage ratio over 12 months – ended 16% points higher. This is because the 2022 figures that dropped out of the average were significantly lower than the new monthly figures for 2023.
|
Forward |
31 December 2023* |
31 December 2022 |
|
|---|---|---|---|
|
Assets |
€560 million |
€464 million |
|
|
Pension obligations |
€386 million |
€324 million |
|
|
Annual return (incl. coverage of risks) |
8.1% |
-20.8% |
|
|
Current coverage ratio |
145% |
143% |
|
|
Policy coverage ratio |
155% |
139% |
|
|
TBI coverage ratio |
153% |
141% |
|
|
Interest rate |
2.15% |
2.23% |
|
* The figures for 31 December 2023 are provisional year-end figures. We will publish the final figures in the annual report before the summer.
Notes on the coverage ratios
The coverage ratio is the ratio of the assets (value of the investments) to the pension obligations (value of all future benefits). The levels of two different Forward coverage ratios as at the end of October are deciding factors when deciding on a pension increase:
- Policy coverage ratio: the average of the coverage ratios of the last 12 months.
- TBI coverage ratio: the coverage ratio at which Forward can increase your pension fully. TBI stands for future-proof indexation (‘toekomstbestendige indexatie’): we may only increase fully if we can expect to fulfil this in the future too.
If the policy coverage ratio is higher than the TBI coverage ratio, we can increase the pensions fully. You can see what happens when these coverage ratios relate differently to each other below the coverage ratios graph on the Dutch part of this website.
April 2024