German province to top up public fund with €114m

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  • German province to top up public fund with €114m

GERMANY - The German province of Northrhine-Westphalia (NRW) is seeking parliamentary support for an additional €114m one-off payment into the pension fund for civil servants.

An actuarial report had shown the fund was €94m short of its target funding level.

Another €20m has to be paid in, as more civil servants have been hired this year than expected.

Parliament is expected to approve the amended 2010 budget in December.

Since 2006, the NRW province has paid €500 a month per new employed civil servant or judge into a special fund, similar to schemes in other provinces.

The €3bn NRW public fund, managed by the finance ministry, was advised by the German Federal Bank, as well as "other investment managers", a ministry spokesman told IPE.

Investments are mostly in fixed income, which yields more than NRW debt would, in order to ensure the fund "makes sense economically", he added.

"NRW debt was bought only if at the time an investment was made no other securities with a similar credit rating or reliability were available," the spokesman said.

No detailed information on returns for the fund was available.

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