GERMANY – Bayer Pensionskasse VVAG, the pension scheme of pharmaceutical giant Bayer AG, says it has developed an “appropriate risk structure” to meet its long-term commitments.

According to Bayer’s annual report 2004, released today, the defined benefits scheme, has set “a target investment portfolio aligned to an appropriate risk structure”.

Bayer commented on the pension fund’s results saying: “Its investment strategy focuses principally on stringent management of downside risks rather than on maximising absolute returns.”

“It is anticipated that this investment policy can generate a return that enables it to meet its long-term commitments.” No further details about the scheme’s asset allocation were available. Bayer Pensionskasse’s annual report will be published on June 21.

As at the end of 2004, the pension fund had €4.9bn in assets and liabilities worth €9.8bn. According to the report actual returns on the scheme assets amounted to €250m, compared to €320m of 2003.

Employees’ contributions went down €1m to €37m, compared with the previous year.

Pension provisions for Bayer’s defined benefits plans are calculated in accordance with the IAS 19 standard.

In 2003 Bayer made €150m available to the scheme in the form of an interest-bearing loan to provide “profit-sharing capital”, the report also said.

So far €100m has been borrowed but the fund has time until 2010 to draw the other €50m.