EUROPE – Fortis plans to adapt the asset allocation at its own pension schemes to match asset duration with liabilities.
The move comes amid a move towards bonds within its pension assets.
“Fortis intends to gradually adapt its asset allocation policy in the future in order to ensure a closer match between the duration of the assets and that of the pension liabilities,” the group said.
The plan assets comprise predominantly fixed-income securities and investment contracts with insurance companies, it added.
But it said: “Bonds have taken a larger part in the global allocation in 2005.” Fixed income now accounts for 69%, from 65% at the end of 2004.
Equities’ share has dropped to 17% from 21%. Real estate is now 3% from 2%.
According to its 2005 annual report, Fortis’ internal investment policy avoids derivatives and emerging markets for pension plan funding (with the exception of the Turkish plans).
It added: “Hedge funds are used prudently. Derivatives are used only to limit plans exposure to interest rate risk.”
The company reported a €2.8bn defined benefit liability at the end of 2005, from €2.7bn a year earlier.
Meanwhile Fortis said it has signed a previously announced memorandum of understanding with Irish post group An Post.
Last month Fortis Investments’ chief executive Richard Wohanka said the division would look at further "strategic acquisitions".
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