Assets under management at Belgian pension funds grew by 18% last year, largely as a result of asset transfers from foreign pension scheme providers, according to the Belgian financial services regulator.

At the end of 2017, the total balance sheet of Belgian pension funds stood at €35.1bn, up from €29.8bn the year before, according to FSMA.

The regulator attributed the “significant” increase mainly to asset transfers from foreign pension funds under EU cross-border pension rules. Announcing its annual statistical overview, it said IORPs exercising cross-border pension activities – by way of managing foreign pension plans – had seen their combined balance sheet grow to €8.9bn.

There were 201 pension funds in Belgium at the end of last year, two more than in 2016. Membership grew by 4% to reach just over 1.7m, with almost a quarter of this increase at pension funds with cross-border activity.

One of the main aims of the new European pension fund directive, IORP II, is to increase cross-border activity. In the Netherlands, however, there are concerns that pension transfers to its neighbour are at least in part motivated by the appeal of more lenient regulation.

FSMA also reported that Belgian pension funds invested around three-quarters of their assets in mutual funds, principally equity and bond funds. They invested 11% of their assets directly in bonds and 9% in equities.

In 2017, these investments returned 5.3%, the supervisor said.

Belgian pension funds’ coverage ratio fell slightly to 124%, due to low interest rates, it added.

belgian iorp au m chart small

Source: FSMA, IPE