As we were able to report earlier, the policy funding ratio at the end of 2017 was above the required equity of 132%. As a result, Mars Pensioenfonds 's financial position is healthy again. So healthy that we have decided to reduce the investment risk. In this way we can safeguard the financial position of the fund in steps.

On 1 January 2018, we increased the pensions in payment with a partial supplement. If the policy funding ratio remains above the required level, we can grant a full supplement as of 1 January 2019. Both our good investment returns and the slightly higher (but still very low) interest rate contributed to the recovery. The current funding ratio has increased further this year. As a result, the policy funding ratio also rose, to above 135%.

The policy funding ratio in brief

The policy funding ratio is the average of the current funding ratios of the last twelve months. The policy funding ratio is important for all policy decisions, such as determining whether a pension fund is healthy, how much premium the employer must pay to the pension fund, and how much supplement can be given.

Board decides to secure the achieved position (in part)

We have been thinking for a while about what to do if the financial position improves and exceeds the required capital, which is the case now. The investment committee proposed to reduce the investment risk if the funding ratio increases. The proposal also means that we can take more risk again if the funding ratio falls.

Social partners and Accountability Body agree to proposal

The board of Mars Pensioenfonds has now consulted with the social partners and the Accountability Body. They agree with the proposal to reduce investment risk now. Is the situation turning around and is the funding ratio falling? Then everyone agrees that the pension fund may again take a little more investment risk.

Coordination with social partners and VO

According to the Financial Assessment Framework Act, it is important to discuss the risk appetite with the most important stakeholders around the pension fund. Think of the representatives of the employees, the works councils, the employer and the Accountability Body (VO) of the pension fund. The VO consists of representatives on behalf of the employees, pensioners and the employer.

First step has been taken

In the meantime, the first step has been taken, because we have reached the point where we can reduce investment risk (the policy funding ratio was 135%). This first step has reduced our required equity to approximately 124%. This means we have more leeway. There is therefore less chance of a reserve deficit or underfunding, so for the employer less chance that he will have to make additional contributions. And there is a very good chance that at the end of the year we will be able to pay the full fee and maybe part of the catch-up fee.

Allowance

Have you built up pension in the final pay plan and are you now out of employment or retired? Then you have the chance to win a (full) allowance or catch-up allowance. Whether you receive an allowance depends on the financial situation of Mars Pensioenfonds. If our policy funding ratio exceeds the required equity capital, we will see whether we can provide a supplement to the pensions.

Of course, we always have to deal with the financial markets when granting supplements. However, there is also still risk in the investment portfolio to strengthen the financial position in the coming period.

To stay informed?

Would you like to stay informed about the financial situation of Mars Pensioenfonds? Then check the website around the 20th even every month. There you will find the latest policy funding ratio every month. And if there is other important news, we will of course report that too.

Kind regards on behalf of the board,

William of Ettinger

Chairman of the board of Mars Pension Fund