Ärzteversorgung Westfalen-Lippe (ÄVWL), the pension fund for doctors in Germany’s Westphalia-Lippe region, recorded net returns on security assets of 3.5% last year, below the 4.5% achieved in 2019, among uncertainties that exacerbated volatility levels, it said in its financial report for 2020.

Returns in 2020 go up to 4.3% by also taking into account actuarial reserves, above the interest rate of 4% applied by the pension fund on the saved capital but below the 5.1% recorded in 2019.

ÄVWL totaled returns on assets of €502.7m in 2020, down from €566m the prior year. Total assets stood at €13.3bn, up 3.7% year-on-year from €12.8bn in 2019.

Net returns on investments across the Spezialfonds reached 3.7%.The mixed Spezialfonds, which currently allocates 50% of its assets to equities, 40% to bonds and 10% to tactical and total return mandates, missed its expected returns, with a -4% performance, closing 2020 with assets of €3.1bn.

The self-managed Rentenspezialfonds, which allocates to bonds, returned 2.9%, closing the year with €783m in assets.

The Spezialfonds investing in alternatives, which include a Spezialfonds split into two sub-funds to cover alternative investments, two funds for infrastructure investments and a fund for investments in the rail vehicle rental sector, generated 5% returns on total assets of €2.7bn.

ÄVWL is invested in 14 real estate Speziafonds with a total asset volume of around €2.2bn. 

The number of members grew by 1.8% year-on-year in 2020 to a total of 45,256, from 44,452 in 2019. Contributions rose by 3.5% last year to €549m, compared to €530.2m the prior year. Costs for the pay-out of benefits amounted to €535.7m, up from €507.9m in 2019.

PKBS gloomy outlook

The board of directors for the Pensionskasse of the city of Basel, PKBS, has decided to cut the technical interest rate from 2.25% to 1.75% form 1 January 2022.

The board has also decided to cut the conversion rate used to calculate pension pay-outs upon retirement, the Umwandlungssatz, from 5.44% to 5.20% from January 2024.

PKBS expects lower returns in a low interest rate environment, it said. The board is introducing the so-called splitting model, dividing retirement assets of up to CHF500,000 and beyond that sum.

As a result of the new model, the old conversion rate of 5.80% applies to savings of up to CHF500,000, so that insured members will receive the same amount of pensions as before the cut.

The lower conversion rate will only apply to retirement assets exceeding CHF500,000, PKBS said, adding that it will simultaneously increase the interest rate on the saved capital of active insured members to 2.50% from 2024.

Allianz continues to cut guarantees

Life insurance firm Allianz Lebensversicherung, a subsidiary of Allianz, will stop offering guarantees on some occupational pension products, according to reports.

The decision applies to contribution promises from the employer with guaranteed minimum benefits, so-called Beitragszusage mit Mindestleistung.

Allianz will stop offering guarantees on contracts from July. Allianz Pensionskasse, the provider of occupational pensions for the Allianz group, will stop taking on new clients from 2022.

To read the digital edition of IPE’s latest magazine click here.