2022 was a financially bad year. We saw negative returns for all participants in 2022. This does not immediately lead to a lower pension. Want to know how? Then read the frequently asked questions about the return in 2022.
The beginning of the year was dominated by geopolitical tensions: Russia’s invasion of Ukraine, which led to worldwide sanctions against Russia. Raw material prices shot up, energy costs rose and we were faced with high inflation and significantly more expensive groceries. It was also a bad year for our assets. This was largely caused by the sharp rise in interest rates. To combat inflation, central banks raised interest rates in steps. These rate hikes and inflation fears caused many of our equities to fall in value. And our bonds were also hit hard by rising interest rates. The assets of Pensioenfonds PGB decreased by -25.3% in 2022. We were not alone in this: in 2022, pension funds achieved an investment return of -21% on average after deduction of costs.
We saw negative returns for all participants in 2022. This does not immediately lead to a lower pension. As you approach your retirement age, the negative return is mainly caused by the increased interest rate. But this increased interest rate also has a positive effect on the final pension we purchase with your pension capital. This becomes cheaper due to a higher interest rate. This allows us to purchase more pension from your capital. Your pension may be worth less due to inflation.
A negative return is of course annoying, but it is part of investing. It is important to achieve a good investment result in the long term. That is why we have an investment policy aimed at an average good return over a long period. A bad year therefore does not automatically mean that we immediately adjust the investment policy. That may even be unwise. One year with a negative result can still be made up with future returns. This page lists our investment returns over the past 10 years.
De Nederlandsche Bank draws up rules for the investment policy of pension funds and supervises this. Of course we act where necessary and possible. But always within the frameworks set by the regulator.
Rising interest rates had a positive effect on your pension because it meant we needed to reserve less money for the pensions of now and in the future. For the first time since the economic crisis of 2008, we were able to increase pensions twice in a short period of time. The total increase in 2022 amounted to 3%. To better compensate for the persistent inflation, the Board decided in December 2022 to adjust the policy to make increases, also with a view to the new pension system. This made it possible to increase all pensions by 7% from 1 January 2023.
Looking back at the first half of 2023, we see that the financial position of Pensioenfonds PGB improved. We achieved a positive investment result of 4.5%. The investments to hedge the interest rate risk (matching portfolio) achieved a return of 2.1% over the first two quarters. The investments to achieve an extra return (the return portfolio), such as equities, achieved a return of 5.8% over the first two quarters.
For more information about our financial situation, please consult our quarterly reports.