NETHERLANDS – The €5.3bn Hoogovens pension fund has introduced two investment portfolios to enhance transparency, as part of its solvency commitments.
According to the scheme of the Dutch counterpart of steelmaker Corus, a ‘matching’ portfolio is meant to follow the value development of its liabilities based on market rates. It consists of fixed income and derivatives and accounts for 52.8% of the scheme’s total assets.
A separate ‘return’ portfolio contains equities as well as real estate and absolute returns, it said. “The returns are used for keeping the pension contributions at an affordable level”.
During the first three quarters, the two portfolios returned 18.5% and 8% respectively.
The scheme reported returns of 5.4% for the third quarter, totalling 13.5% over 2005 so far. Its assets increased by €524m.
Declining interest rates have increased the fund’s liabilities during the first three quarters by 6.9% to €5.07bn. The coverage ratio based on market rates and the fixed 4% accounting rate is 137% and 143.7% respectively.
Hoogovens’ pension fund has approximately 37,000 members, of which 12,000 are active, 15,000 are pensioners and 10,000 are deferred.
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