“Positive result on balance”
Our investments are based on a long-term horizon. Enjoying your retirement already? Are you looking forward to the pension you’ll get when you retire and the pension choices you’ll be able to make? Or is your retirement far in the future because you’re a young starter at ING? No matter what phase of life you’re in, we fund your current or future pension mainly from the return realised on the pension fund’s investments. The remainder is funded by contributions paid into the pension fund (totalling 30.5%). Your employer contributes 23% to this. Your personal contribution is 7.5%. What does this mean for you? What can you do? Check it in your pension roadmap.
In the second quarter, the return portfolio’s performance was positive. All asset classes, corporate bonds with higher risk (high-yield bonds) and corporate bonds with less risk (investment grade) and real estate.
The return did, however, lag behind the benchmark. This was because protective option structures on equity indices were put in place ahead of the transition to the new pension scheme (the Dutch ‘Future Pensions Act’, or "Wtp"). These structures provide greater certainty around participants' pension capital, but at the same time meant that we benefited less from rising share prices.
The aim of this protection is to ensure that our fund is well positioned to meet certain commitments under the new scheme. One example is the compensation for the abolition of the "doorsnee" (average-premium) system. The protection is in place until the date on which we transition to the new pension scheme (2028).
The performance of the overall matching portfolio was positive in the second quarter: 1,6%. This was 2% better than the benchmark. This portfolio invests in European sovereign bonds, bonds issued by semi-government institutions, covered bonds and residential mortgages in the Netherlands. The portfolio also contains interest rate swaps and repos (short-term loans covered by collateral). An important factor impacting the value development of the matching portfolio is the development of market interest rates. When interest rates rise, bonds decrease in value.
Exchange rates play a major role in the foreign investments of the return portfolio. Our pension fund hedges a major part of the exchange fluctuations. This made a very small positive contribution to the portfolio return in the second quarter.
On balance, the total return was +3.7%. In the next quarterly update, you’ll read how our investments continued to develop.
We assess the return on investments by comparing it with a benchmark, which is derived from the strategic investment policy. A benchmark is a yardstick used to assess the long-term performance of the investment portfolio. The total return is a weighted average of the returns from the matching portfolio and the return portfolio.
Our fund hedges currency fluctuations to a significant extent in order to reduce the volatility of the total portfolio results and, in turn, the funding ratio. The result of this currency hedging is added to the total return.
This quarterly report has been carefully prepared. The final figures for 2026 will be published in the anual report. You cannot derive any rights from this report.