Progress financial situation 2022

Throughout 2022, the current coverage ratio was significantly higher than in 2021. The policy coverage ratio (the average coverage ratio of the last 12 months) also rose as a result, to 170%. That is no less than 26% point higher than at the end of 2021. 

In this article you can read more about Progress’ key figures as per 31 December 2022

All figures in this article are preliminary year-end figures. We will publish the final figures in the annual report in a few months' time.

Assets down by 13%
In 2022, Progress suffered a significant loss on investments. This, and the payment of pensions, reduced its assets with 13% to € 5.3 billion.

Under Investing you will find more information about how the total return was achieved (only in Dutch).

Pension obligations 20% lower
In 2022, we saw interest rates - which pension funds use to calculate their obligations - increase fivefold: from around 0.5% to 2.7%. This resulted in an exceptionally large fall in its obligations during the year. This is because when interest rates are high, a pension fund needs less money to pay out all current and future pensions than when interest rates are low. This works just like a regular savings account: if the interest rate is 1%, you have to put in more to reach your savings goal many years from now than when the interest rate is 5%.

On balance, Progress' pension obligations fell by more than 20% in 2022. 

Policy funding ratio up to 170%
In 2022, Progress' assets fell sharply. Nevertheless, the financial situation improved. This is because its pension obligations decreased even more than the assets. As a result, the current coverage ratio rose during the year, which also led to an improvement in the policy coverage ratio (average coverage ratio of 12 months). It rose by 26% point to 170%. This means that Progress's financial situation is very good.

Progress	31 December 2022	31 December 2021
Assets	€ 5,309 million	€ 6,096 million
Pension obligations	€ 3,201 million	€ 4,061 million
Return on investments	-10.3%	11.2%
Current coverage ratio	166%	150%
Policy coverage ratio	170%	144%
TBI coverage ratio	129%	123%
Interest rate	2.69%	0.53%

Explanation and importance of the coverage ratios
The coverage ratio shows us the relation between the assets (the value of our investments) and the pension obligations (the value of all future pension pay outs). A coverage ratio of 100% means that a pension fund has just enough money to pay out all the pensions it is obliged to – now, and in the future.

Whether the annual pension increase (indexation) is possible or not, is determined by two different coverage ratios of Progress as per the end of October: 

• Policy coverage ratio: the average coverage ratio of the last 12 months.
• TBI coverage ratio: the coverage ratio at which Progress can fully increase your pension. TBI stands for future-proof indexation (‘toekomstbestendige indexatie’): according to the law, we can only fully increase if we also expect to realise this in the future.

The table below indicates what happens at Progress in case of various situations:

If the policy coverage ratio is…	Is indexation possible?
higher than the TBI coverage ratio.	Yes, full indexation is possible.
between 110% and the TBI coverage ratio.	Only partial indexation is possible.
below 110%.	No, but your pension will not decrease either due to the additional contribution agreement with Unilever.

On the Dutch Progress website you can find monthly information about our financial situation.