BELGIUM - Belgian pension funds delivered median returns of -15.5% over the first three quarters of 2008, forcing corporate sponsors to inject cash into their plans, according to consultants Mercer.
In its Pension Investment Performance Survey (PIPS), analysing 90 active funds - around two-thirds active funds in Belgium - Mercer found that funds' return was heavily penalised by the negative performance of the equity markets, with equity portfolios returning -27.2% between January to October -27.2%.
The combined property returns since the beginning of this year were -19.6%, the second most negative asset class for Belgian funds.
Nonetheless, over the nine month period between the beginning of the year and end of September, pension funds have broadly maintained their asset allocation, according to Mercer.
"The percentage invested in equities decreased by 4.5% while the percentage invested in bonds increased by 5.4%. The major part of the shift is to be explained by the difference in return, so the actual shift from equity investments to bonds is limited," said the consultant.
Thierry Laloux, retirement business leader, that many employers will have to inject cash into their pension funds: "The situation should also remind employers who moved to defined contribution approach about their responsibility to contribute a sufficient level of contribution to provide a reasonable level of retirement benefit to their employees and to provide adequate information to their employees about the impact of financial returns on their benefit entitlements."
The study analysed 120 investment portfolios with total assets of over €5.5bn.
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