IPE. Pension funds in the Netherlands delivered an average return of 10.2% after costs in 2020. Returns varied widely, between 0.5% and 20.1%, with smaller funds doing somewhat better than the largest schemes.
Consultancy LCP compiled the returns of 184 pension funds based on figures provided to regulator De Nederlandsche Bank (DNB). The 10.2% average return includes the return on interest rate hedges. If one accounts for the size of pension funds, the average return drops to 8% as on average the larger schemes did worse than their smaller peers.
Pension funds made the best returns on their interest rate hedges, as interest rates dropped to record lows over the year. The remainder of the returns was made on equities and other return assets such as real estate.
The 8% average weighted return was about half the size of 2019’s returns of 16.7%. LCP’s Jeroen Koopmans estimated the positive 2020 returns were an unexpectedly good result for pensions funds.