NETHERLANDS – The €24bn Dutch metals industry pension scheme Pensioenfonds Metaal en Techniek says it is mulling a more “dynamic” asset strategy.
“We’re investigating a more dynamic asset strategy,” said Theo Jeurissen, investment director at the fund. It is looking at the move in response to the changing regulatory environment in the Netherlands, he told a conference today.
And he told delegates that the new environment meant the scheme was looking to shift its risk onto the participants in the fund, specifically a shift away from defined benefit arrangements to defined contributions.
The idea is to reduce the risk of the fund “by shifting it to more places” he told the Liability Driven Investment event organised by financeIQ.
He pointed out that Dutch minimum funding requirements, with a one-year recovery period, created a short-term focus on nominal liabilities. There was a risk of funds falling into a ‘solvency trap’ he said. And moving to market-based discount rates, as opposed to the 4% previously, made funding ratios “much more volatile”.
Jeurissen said the new regulations meant the scheme had had to make some “fundamental choices”. It opted to put indexation first. But he said that complying with the rules was at the expense of its indexation ambition.
No comments yet