Sections

Interest rates hit coverage ratios at large Dutch schemes

Related images

  • Interest rates hit coverage ratios at large Dutch schemes

Related Categories

NETHERLANDS - The €5.3bn pension fund of steelworks Hoogovens, as well as two of KLM's large pension schemes, saw their coverage ratios hit by dropping long-term interest rates in the second quarter.

The Stichting Pensioenfonds Hoogovens reported a decrease of its nominal coverage ratio from 118.3% to 112.5%, despite its return on investments of 1.5%.

During the same period, its real funding ratio fell by 1.6 percentage points to 81.2%.

Pension fund officials said: "Compared to the drop of the nominal coverage ratio, the change in real funding ratio is limited because of the decreased expectations for inflation."

Meanwhile, the €4.8bn KLM pension fund for ground staff reported a loss of 0.1% in the second quarter.

Mainly due to dropping interest rates and paid indexation, the negative return contributed to a decrease of its nominal coverage ratio by almost 9 percentage points to 11.4%, it said.

The scheme added that its real coverage ratio has fallen from 81.1% to 74.4%.

Lastly, the €1.4bn KLM scheme for cabin staff said it generated a return of 0.3% on investments, but saw its nominal funding drop by 12.5 percentage points to 114.6%.

Its real coverage decreased from 72.3% to 65.3% in the second quarter.

During this period, long-term interest rates fell from almost 3.7% to 3.2%.
 

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2563

    Asset class: Mid & Small Cap Equities.
    Asset region: Global.
    Size: USD $130m.
    Closing date: 2019-09-27.

  • QN-2564

    Asset class: Large Cap Growth Equities.
    Asset region: Global Developed Markets.
    Size: USD $130m.
    Closing date: 2019-10-04.

  • DS-2567

    Closing date: 2019-10-02.

  • QN-2569

    Asset class: Local Currency Bonds.
    Asset region: Global Emerging Markets.
    Size: $500m.
    Closing date: 2019-10-10.

Begin Your Search Here
<