Belgian pension funds generated a nominal return of 5.7% on average last year, according to the Belgian sector organisation PensioPlus.

However, the group warned that funds will have to increase their investments in the real economy in order to keep on generating sufficient returns.

“Bonds are no longer a safe haven and are becoming increasingly volatile,” it said. Last year, Belgian pension funds allocated 45% of their assets to fixed income, with just 7% in alternatives and 6% in real estate.

The 5.7% return compares to average gains of 4.4% and 11.1% over 2015 and 2014, PensioPlus said. The organisation drew its figures from 52 schemes with combined assets of €14.4bn.

It added that returns had averaged more than 6.4% a year during the past 25 years.

As well as the 45% in fixed income, Belgian pension funds had stakes of 39% in equity. The schemes’ holdings of cash were 4% on average, while the allocation to alternatives, such as insurance, infrastructure, private equity, and convertible bonds, totalled 7%.

During the presentation of the preliminary figures, PensioPlus reiterated earlier warnings of the looming ‘devastating impact’ of the financial transaction tax (FTT) on Belgian pension funds.

Philip Neyt, chairman of PensioPlus, called on the Belgian government to abandon the introduction of the so-called ‘Tobin tax’ if its rules were also to apply to non-commercial players such as pension funds.

PensioPlus estimated that the FTT would cost Belgian pension funds €20m in direct expenses annually, but said that this amount would at least triple if the tax also applied to underlying investments.

“This means that 5 to 24 months of pensions accrual during a worker’s entire career would be lost to the FTT,” it said.

The lobbying organisation also reiterated that the introduction of the Tobin tax will scupper further relocation of pension funds to Belgium and that existing pan-European schemes may even leave.

Currently, there are approximately 80 cross-border pension funds in Belgium.

PensioPlus further warned that pension funds in countries that don’t participate in the FTT, including the Netherlands and Luxembourg, are also to suffer from the tax if they invest through a Belgian investment vehicle.

The ministers of the ten European member states that are considering to adopt the Tobin tax are to meet on Friday to discuss the subject.