Belgian pension funds produced returns of –12.11% in 2002 according to provisional results released by the Belgian Association of Pension Funds (ABPF).
In preparation for its annual enquiry into the financial results of Belgian pension funds, the ABPF surveyed a handful of funds with more than E4bn in assets under management, representing around a third of Belgian’s total pension fund assets. The average return for 2002 was –12.11% compared to 2001’s returns of –5.1%. The ABPF says the returns are in line with neighbouring countries.
Despite two consecutive years of negative returns, the average annual return for Belgian pension funds since the survey began in 1985 is +7.37%.
Falling stock markets are partly responsible for the negative returns in 2002 – the MSCI EMU fell 34% and the BEL 20 fell 25% over the same period. Although, as the ABPF points out, Belgian funds do not invest excessively in equities. And 40% percent of Belgian schemes’ assets were invested in fixed interest securities at the end of 2001 and 5% was invested in property.
The ABPF will run a more detailed analysis and enquiry, which will reveal the funding levels of Belgian schemes. It believes that, based on global data and these provisional results, the average coverage ratio will be above 100% – but with some individual cases being underfunded.
In those instances, l’Office Controle d’Assurances will set a five-year period for funds to bring their coverage ratios back up to 100%.