The number of Dutch pension funds with a funding shortfall has decreased from 63 to 42 during the past nine months, according to regulator De Nederlandsche Bank (DNB).

Its statistics revealed that at the end of June the average coverage ratio of a sample of 130 schemes exceeded 110%.

Under the Netherlands’ financial assessment framework (FTK), at this level schemes can start granting partial inflation compensation.

The schemes in DNB’s sample had 1.4m active participants, 1.1m pensioners and 3m deferred members.

However, underfunded pension funds – with a coverage of up to the minimum required level of 104.2% – represented most active participants.

More than 20 schemes, with 3.2m employees, 1.9m pensioners and 4.1m deferred members combined, had a funding ratio of between 100% and 104.2%.

If a pension fund’s coverage ratio is still short of the required minimum of 104.2% at the end of 2019 or 2020 – depending on the moment their shortfall started – they must make cuts to pensioner benefits.

At end-June, the funding level of four of the five largest pension funds in the Netherlands was short of the minimum level.

Europe’s largest pension fund, the €414bn civil service scheme ABP, had a funding ratio of 103.9%, according to DNB.

The €203bn healthcare scheme PFZW’s ratio was 100.6%; PMT, the €72bn sector scheme for metalworking and mechanical engineering was 101.9% funded; while PME, the €47bn pension fund for the metal and electro-technical engineering industry had a funding ratio of 101.4%.

With a coverage ratio of 117.7%, building industry pension scheme BpfBouw was in the best financial shape of the five largest schemes in the Netherlands.

Multi-sector pension fund PGB closed the second quarter with a coverage ratio of 108.5%.

Funding at the large company schemes of ING, Shell, ABN Amro and Rabobank stood at 143.2%, 129.5%, 130% and 118.3%, respectively, at June-end.

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