Belgian pension funds, with more than €20bn in assets under management, have returned 5.7% on average over the first half of this year, according to the Belgian Association of Pension Institutions (BAPI).

Addressing a press briefing in Brussels to cover the funds’ performance over the period, BAPI president Philip Neyt described the returns as “good” but expressed concern over the low rate of return on government bonds.

Belgian pension funds’ performance could suffer in future, he said, if Gilts continue to bring in only around 1.5%. 

Neyt acknowledged that investments made in corporate bonds “might bring in 3-3.5%”, but he added: “I’m not sure you’re properly compensated for any risk involved.”

According to BAPI, Belgian schemes returned just over 6.7% on average over the first half of last year, and 12.1% over the same period in 2012.

Meanwhile, the association said the average pension fund allocated 48% of its portfolio to bonds, 30% to equities, 11% in ‘other’ investments including private equity and infrastructure and 8% in real estate, with the remainder in cash.  

The bonds are mainly placed within the euro-zone, Neyt told IPE, while equity investments are generally global. 

The real estate holdings are mainly within Belgium itself.

All sectors of investment fared well over the period, Neyt said, citing the benefit of a low rate of inflation.

However, Neyt declined to answer questions on what measures the government might be taking to encourage longer working careers in Belgium.

The proposed prolongation of working lives is a sensitive issue in the country. 

Many Belgians cease working when they reach 60.

Neyt spoke in favour of a working life of 45 years for most categories of employees.

The task of BAPI, established in 1975, is to represent all non-profit organisations that administer or provide occupational pension schemes outside the Belgian state social security system.

The organisation works on a sector basis, with each sector covering a different industry.