GERMANY – Despite last year’s bull run on equities, pension funds for companies on the Dax index kept allocations to the asset class at around 40% in 2005 – virtually unchanged from 2004 – according to a new study by consultant Rauser Towers Perrin.

It found the schemes had an average of 41.3% of their assets in equities at the end of 2005, down from 42.9% a year earlier.

The study also said the funds’ average bond allocation at the end of 2005 was 44.5%, down from 46.7% a year earlier.

Meanwhile, the average allocation to real estate and alternative asset classes – including private equity and hedge funds – rose to 5.9% from 4.1%, and to 8.1% from 6.4%, respectively.

Thomas Jasper, board member of Rauser who co-authored the study, said the averages were arrived at with input from 23 of the 30 companies listed on Germany’s blue-chip Dax index.

“These are only averages. There were of course those who had a much higher or lower exposure to equities. ThyssenKrupp, for example, had an average of 67% in equities, while Continental had just 11%,” Jasper told a news conference at the firm’s Frankfurt office.

The study also found that the worldwide pension liabilities for the Dax companies rose 19% in 2005 to €247bn. At the same time, the firms’ pension fund assets jumped 34% to €139bn.

According to the study, another €63bn in pension assets are on the Dax firms’ balance sheet, leaving an apparent deficit of €45bn. Rauser pointed out, however, that under international accounting standards (IAS) the €45bn gap is not necessarily seen as a funding deficit.

It also cited previous IPE reporting in stating that two-thirds of the companies listed on the Dax had created contractual trust arrangements (CTAs) for their pension liabilities.

“We think the CTA trend will continue, especially where smaller listed companies are concerned,” Jasper said, citing the 70 firms traded on the M-Dax (midcaps) as an example.

Industry sources told IPE earlier this year that the next likely candidate for a CTA was luxury carmaker BMW, which has €2.6bn worth of pension obligations on its balance sheet.

Yet although BMW has seriously considered the move, it has taken no action. The carmaker may have more to say about the future of its pension plan at its annual shareholder meeting on May 16 in Munich.