NETHERLANDS - The €3.45bn pension fund of Dutch telecoms firm KPN has posted a return on investments of 8.4% in 2004, the scheme said.
The KPN fund spoke of “a good investment year”. Last year its investments yielded 7.6%.
Equities were the best performing asset class at 10.5%, with commodities returning 8.4%. Bonds returned 7.7%. Real estate yielded and market neutral hedge funds returned 6.7% and 1.9% respectively.
Due to the three poor investment years at the start of the decade, the five-year’s average returns on investments are 0.7%. The average returns of WM’s Universe were 2.2% during the same period. The ten-year’s average however is 8.9%, which is more than two percent higher than has been forecasted, the scheme added.
The coverage ratio of Pensioenfunds KPN has risen to 116.9%, which is still under 123.5% agreed with the pensions regulator DNB.
This year KPN’s long-term asset mix will consist again of 50% fixed interest investments, 34% equity, 10% real estate, and three percent in both commodities and hedge funds.
The scheme changed its legal structure from industry-wide fund to company pension fund last year. This will affect the way members’ representatives on the board are being appointed, but it won’t have consequences for the members’ pension rights.
The board’s decision to an indexation this year is provisional and will depend on the availability of funds within the pension scheme. There hasn’t been an indexation since 2001, when KPN’s scheme paid four percent.
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