Financial situation Progress end 2021

Progress was in good financial shape at the end of 2021. Thanks to an excellent return on the investments, its assetts reached its highest level in its 100-year existence. In addition, the obligations decreased.
In this article you can read about the key figures of Progress 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
At over € 6 billion, Progress' assets has never before been so high.
Over the whole of 2021, assets increased by more than € 500 million. This is purely the result of the 11.2% return on investment achieved. Since its closure in 2015, Progress no longer receives contributions, only pensions are paid out.

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

Obligations decreasing
The granted pension increases (indexations) as per 1 January 2022 have already been included in the calculations at the end of December. Despite this, Progress's obligations decreased by € 300 million. This was due to the payment of pensions and because the interest rate rose (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. Our coverage ratio is determined by our assets on the one hand and our pension obligations on the other.

In 2021, the current coverage ratio (the ratio of assets to obligations) rose by 22% points to 150%. The policy coverage ratio (average coverage ratio of the past 12 months) also rose, by no less than 27% points to 144%. This is because the 2020 figures that were dropped from the average were significantly lower than the 2021 figures.

Progress	31 December 2021	31 December 2020
Assets	€ 6,099 million	€ 5,578 million
Pension obligations	€ 4,064 million	€ 4,364 million
Return on investments	11.2%	5.0%
Current coverage ratio	150%	128%
Policy coverage ratio	144%	117%
TBI coverage ratio	123%	122%
Interest rate	0.53%	0.12%

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 policy 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.