Last year the Belgacom Pension Fund selected eight fund managers and a custodian bank to handle the first tranche of its Bfr55bn ($1.6bn) fund, from the 60-plus respondents to its contract offer.

Following an asset liability study to determine the strategic asset allocation, provisional benchmarks and tactical asset limits were set.

The provisional benchmark, with the tactical asset allocation range, was as follows:

  • Belgian bonds 50% (40–75%);
  • international bonds 20% (0–30%);
  • Belgian equities 15% (5–20%) and
  • international equities 15% (5–15%).

Each selected manager was given an identical tranche of the Bfr7bn ($0.2bn) being outsourced and each tranche had the same overall benchmark, though individual managers are understood to be able to vary them with their style.

They were:

  • BZW Barclays Global Investors (London);
  • Fortis Investments Belgium (Brussels);
  • Gartmore Capital Management (London);
  • Generale Bank (Brussels);
  • Goldman Sachs Asset Management International (London);
  • Indosuez Asset Management (Paris);
  • Lombard Odier Asset Management (Amsterdam) and
  • State Street Bank (Paris).

Citibank in Brussels was chosen as global custodian. The pension fund says a complete separation between the depositary and investment roles was decided on for reasons of control and security. The same financial institution could not act as investment manager and as a custodian or sub-custodian.

The Belgacom Pension Fund was created legally in 1995 to safeguard the retirement of the company’s employees by guaranteeing the total separation of pensions reserves from the risks associated with company assets. It did not follow the usual private fund route of creating a standard pension fund but was made a special legal entity.

Initial funds of Bfr46bn were transferred at the end of 1995, making it Belgium’s largest funded scheme. It has responsibility for paying the pensions of 9,000 pensioners and has an active membership of 23,000, with 1,400 deferreds. The fund is projected to grow to Bfr154bn ($4.8m).

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