The 2012 results from the Netherlands' five biggest pension funds out today underline how low interest rates are continuing to batter the sector and the role that risk-hedging swaps and bonds strategies play in keeping funds afloat.

Interest rates, and with them the yields on bonds and swaps, in the euro area continued to decline during 2012 - from 2.7% at the start of the year to 2.4% by its end. Pension funds use these rates to gauge their liabilities, and the lower the rate falls the larger their liabilities get.