Dutch roundup: Progress, Vervoer, PostNL
Progress, the €4.7bn Dutch pension fund of Unilever, lost 6.5% on investments over the third quarter due to falling interest rates and declining equity markets.
The pension fund also cited the impact of the new ultimate forward (UFR) rate for discounting liabilities, which was lowered this summer.
Rob Kragten, the scheme’s director, said he could not yet specify the exact cause of the “disappointing” third-quarter performance, which brought the scheme’s overall loss year to date to 5%.
“We experienced headwinds in almost every asset classes,” he said.
The Unilever scheme saw its nominal funding drop by 15 percentage points to 126%, while its official policy coverage fell by 3 percentage points.
It said the latter, however, still stood at 136% as of the end of September.
According to Kragten, the pension fund lost more than 9% on equities and incurred a “significant loss” on its commodity holdings.
Progress had a 42.2% allocation to equities and a 5% allocation to commodities as of the end of 2014, but it has scaled back its exposure to securities since then in a bid to reduce risk after the scheme closed to new entrants last April.
Kragten said Progress made a modest return on fixed income over Q3 while also generating positive results on private equity.
In other news, the €19.5bn Pensioenfonds Vervoer reported a quarterly loss of -1.1%, leading to a year to date loss of 2.2%.
The scheme for public road transport attributed the 7.5% increase in liabilities over the period chiefly to a 28-basis-point drop in its discount rate to 1.77%.
It added that its nominal funding fell by 9 percentage points to 99.3% and attributed nearly half of this decrease to the lower UFR.
The pension fund conceded it was unlikely to grant indexation in the coming years.
Vervoer reported a 9.8% loss on its 28.5% equity allocation, while real estate and infrastructure generated losses of 0.5% loss and 0.7%.
The scheme’s 67.3% fixed income allocated returned 0.3% over the same period.
Meanwhile, the €7.3bn Pensioenfonds PostNL reported a quarterly loss of 1.9%, due largely to an 11.4% loss on equities.
The pension fund lost 3.7% on its remaining commodity stake before it fully divested its holdings in July.
Fixed income and real estate delivered positive returns of 0.3% and 3%, respectively.
The Pensioenfonds PostNL closed the third quarter with a nominal funding of 104.2% and a policy coverage of 107.7%.