NETHERLANDS - A Rotterdam court has overturned the Dutch pensions regulator's recent demand that SPVG - the pension fund for glass manufacturers - divest more than three-quarters of its 13% gold allocation.

The regulator is now facing a claim for damages, estimated at €10m-11m - the difference between the current gold price and the price when the gold was sold a year ago, according to Rob Daamen, the scheme's deputy secretary.

The court said it was not convinced the regulator had fully taken into account the scheme's specific conditions, or the entirety of its investment portfolio.

It also concluded that interpretation of the so-called 'prudent person' rule should be the sole prerogative of the pension fund, and that the regulator's task was simply to ascertain whether this standard had been applied correctly.

"[The regulator] has not made clear in any way why a gold allocation of 13% is not in conformity with the prudent person rule, and that an allocation of 3% is," the court said.

It also dismissed the watchdog's reference to the drop in the gold price in 1980, or its standard deviation estimate of 33.7%.

Instead, it pointed to the scheme's statement that the gold price had increased steadily over the last 10 years, and that the standard deviation between 2000 and 2010 had been no more than 13.1%.

In its verdict, the court said it would re-open the investigation before it delivered a verdict on the damages.

Spokesman Cees Verhagen said the regulator would look over the verdict closely before deciding whether to appeal the ruling.

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