NETHERLANDS – The €400m pension fund of glass manufacturer Vereenigde Glasfabrieken (SPVG) has slashed its non-euro-denominated government bond portfolio after being pressured by regulator De Nederlandsche Bank (DNB).

Rob Daamen, a board member at the scheme, said: "In the opinion of the DNB, the investments did not match our recovery plan, and meant a too large currency risk, while our pension fund is not fully out of the woods yet."

Last year, SPVG had replaced all its German government bonds – 50% of its large portfolio of AAA government paper – with US government bonds.

This, the pension fund said, was a "very deliberate choice", as "we don't expect much good from the euro".

Previously, it had invested the other part of its 92.5% bond holdings in the government paper of Switzerland (10%), Norway (5%), Australia (5%), Canada (10%), Singapore (2.5%) and Sweden (2.5%).

Recently, SPVG replaced its US bonds with German government paper, which now makes up 57.5% of its government bonds holdings.

According to Daamen, the pension fund is happy with the latest adjustment.

"The costs have hardly exceeded transaction costs, and the prospects for the German economy are reasonable," he said.

SPVG made headlines last year after the DNB ordered the fund to decrease its gold allocation from 15% to 3% in 2011.

Currently, the scheme is awaiting the outcome of an appeal lodged by the DNB against the verdict of a Rotterdam court, which concluded that the supervisor had not been entitled to order SPVG to sell most of its gold portfolio.

Daamen said: "Depending on the new verdict, we will reconsider our initial request for compensation."

During 2011, the glass scheme returned 10% on investments, taking its results since 2007 to 7.7% on average.

SPVG's funding was 104.5% at year-end, just over the required minimum coverage of 104.1%.