NETHERLANDS - The recovery of BPF Bouw, the €26bn pension fund for the building industry, has been so successful that it is already able to grant all its participants 1.45% indexation.
At the same time, the scheme has decided to raise contributions for its average salary pension arrangements by two percentage points to 20.9%, latest results stated.
However, the premium increase appears to have been limited thanks to a quicker than expected recovery, as the new contribution level had initially been set at 22.2%, said Franck Erkens, spokesman for BPF Bouw.
Depending on the building sector they operate in, active participants of the industry-wide BPF Bouw scheme will need to pay between 0.3% and 1.2% of the announced contribution rise.
At the end of October, the pension fund’s cover ratio had risen to almost 112%, according to Erckens. A pension fund is only allowed to grant indexation if its funding ratio is over 105%.
That said, BPF Bouw’s indexation payment is only partial compensation for salary inflation, which hit 2.27% in 2009, Erkens noted.
The scheme’s recovery plan is designed to reach its required financial reserves of 118.2% by the year 2020.
The funding ratio of BPF Bouw was 141% at the start of 2008, but fell to an absolute low of 99.4% by the end of March 2009.
The pension fund said its 31.6% equity portfolio returned 31.4% in 2009, whereas its 43% fixed income allocation delivered 11.2%. Alternatives and property also returned 10.6% and 10.5% respectively.
BPF Bouw - managed by BPF Bouwinvest and pensions provider Cordares - has approximately 846,000 participants, of whom over 210,000 are active and over 209,000 are pensioners.
The scheme has 15,000 affiliated employers within the building industry.
If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com
No comments yet