TPG scheme takes €560m interest-rate hit

NETHERLANDS – Dutch logistics firm TPG says lower interest rates have caused a €560m increase in its pension liabilities.

“The reason for the increase in the accumulated benefit obligation compared to plan assets is mainly caused by the fact that the interest rate decreased from 5.5% in 2003 to 4.75% in 2004 (impact approximately €560m),” TPG stated in its 2004 annual report.

TPG added that its major plan, Stichting Pensioenfonds TPG, returned 8.8% on assets in 2004, compared to 9.1% in 2003. The scheme is around 93% covered.

Pension assets rose to €3.69bn from €3.28bn at the end of 2003 – while the accumulated benefit obligation was up to €4.64bn from €3.39bn.

It added that the equity weighting rose to 44.9% from 43.6% during 2004, while fixed income fell to 46.5% from 46.9%. Real estate weighting fell to 8.6% from 9.4%.

It said it would increase its equity weighting. “It is expected that over time the strategic asset mix will gradually move back to a higher percentage of equity at the cost of a lower percentage of fixed income.”

It said that it made €200m in cash contributions to its various pension funds. “Of these payments, €91m was contributed as prescribed by the minimum funding requirements of the DNB.”

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