Financial situation Forward end 2021

In 2021, Forward's assets rose as a result of contribution income and a positive return on investments. But the obligations also rose. In this article you can read about Forward’s key figures as per 31 December 2021.

All figures in this article are preliminary year-end figures. We will publish the final figures, which are expected to differ minimally, in the annual report in a few months' time.

Assets rising
Due to contribution income and a return on investments of 4.5%, assets rose by more than € 70 million in the past year. At € 523 million, the assets of Forward (founded in 2015), exceeded half a billion euros for the first time by the end of 2021.

Under Investing you will find more information about how the total return was achieved.

Obligations rising
Forward's obligations rose by over € 30 million to € 423 million in 2021. This growth is mainly attributable to twelve months of new pension accrual by current Unilever employees. The obligations rose much less rapidly than the assets. This is due to the increase in the interest rate; if the interest rate is higher, pension funds need less money to pay out all current and future pensions. 

Policy coverage ratio rises
A pension fund’s financial situation is expressed in the coverage ratio. This ratio is determined by our assets on the one hand and our pension obligations on the other (see above).

In 2021, the current coverage ratio rose by 9% points to 124%. The policy coverage ratio (average coverage ratio of the past 12 months) also rose, by 12% points to 122%. This is because the 2020 figures that were dropped from the average were significantly lower than the 2021 figures.

Forward	31 December 2021	31 December 2020
Assets	€ 523 million	€ 452 million
Pension obligations	€ 423 million	€ 392 million
Return on investments	4.5%	9.5%
Current coverage ratio	124%	115%
Policy coverage ratio	122%	110%
TBI coverage ratio	129%	126%
Interest rate	0.67%	0.43%

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 Forward as per the end of October: 

• Policy coverage ratio: the average coverage ratio of the last 12 months.
• TBI coverage ratio: the policy coverage ratio at which Forward 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 Forward 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.
below 100% for a prolonged period of time without expectation of short-term recovery.	No, AND Forward must reduce your pension.

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