Dutch healthcare pension scheme PFZW returns 12.6%
NETHERLANDS - PFZW, the Dutch industry-wide healthcare scheme, posts a return of 1.3% for the fourth quarter of 2010, bringing its a total return for the year to 12.6%. The scheme saw its assets rise to €99.5bn.
Thanks to its strong returns - and especially due to the average long-term interest rate rising to 3.45% - the healthcare scheme added 12 percentage points to its funding ratio, of which 6 percentage points were added in the last quarter, officials said.
To account for the latest increase in life expectancy, however, the scheme had to shave off 6 percentage points from its cover ratio, ending the year with a ratio of 104% - 4 percentage points lower than at the start of the year.
The scheme's director, Peter Borgdorff, urged social partners and the government to waste no time hammering out details of a new pension deal.
"Time is running short," he warned. "Our scheme has taken its responsibility with regard to 2011 - by lowering pension accrual, we are accounting for longer life expectancies. But we would like to make our pensions sustainable and adjust them to the new environment. That takes time.
"If we want to achieve sustainable pensions by next year, officials really need to make haste now."
In the fourth quarter, the fund's investments in private equity (15.5%), structured credit (13.2%) and commodities (12.6%) fared especially well.
Its total equity allocation of approximately 63% returned 7% in the quarter and 13.4% for the year.
PFZW's interest and inflation mandate, which serves as a partial hedge of interest rate and inflation risk, delivered a negative return for the fourth quarter of 14.4% due to the rising interest rate. For the year, the mandate still posted a positive result of 15.6%.
In terms of year-to-date returns, structured credit (31.8%) and private equity (31.2%) boasted the highest performance.
The only asset class to post a negative return for the year was non-euro inflation linked bonds (-6.2%)
PFZW provides pensions to more than 2.3m participants.