NETHERLANDS - The financial buffers of the Dutch financial regulator’s own pension fund have dropped below the minimum level set by the regulator.

The funding ratio of DNB’s pension fund dropped in January to 99.9%, the pension fund board revealed in its latest magazine for pension members.

That means the DNB pension fund has to submit a recovery plan to DNB before the end of this month as Dutch pension funds with a cover ratio of less than 105% have to submit a plan indicating how they will, within the given timeframe of three to five years, be able to eliminate the deficit.

The incurred losses at DNB’s pension fund were largely because of falling interest rates as the pension fund only partly hedged the long-term interest rate risks within the fund.

The fund appointed Black Rock as fudiciary manager in September 2007 and, at the beginning of last year, Black changed the strategic asset allocation of the investment portfolio.

At that time, the combined allocation to European bonds and worldwide equity was reduced to 89% of the total portfolio while the allocations to asset classes such as direct European real estate, high yield bonds, emerging markets and commodities were increased.

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