Dutch roundup: PDN, SCA
PDN, the €5.6bn pension fund of Dutch chemicals company DSM, saw its coverage ratio increase to 106.7% over the third quarter, thanks in part to a 1.9% return on investments over the period.
It attributed the performance to strong equity markets in particular, as well as investments in infrastructure and energy projects.
According to its 2012 annual report, its infrastructure portfolio currently comprises “relatively defensive” investment funds, focusing on public-private partnerships, and onshore wind and solar energy projects.
It also mentioned that it increased its infrastructure investments last year.
PDN said the increase in long-term interest rates, which caused a €212m drop in liabilities, was the main contributor to the 5.4-percentage-point improvement in funding over the last quarter.
The scheme must have a coverage ratio of at least 104.3% by year-end.
In other news, the €534m multi-company pension fund SCA has reported quarterly returns of 1% and 1.1%, respectively, for the former pension funds SCA Hygiene Products Netherlands and ’t Anker, taking their year-to-date returns to -0.9% and -0.5%.
Equity returned 3.6% and 3.5%, respectively, while fixed income returned -0.9% and -0.7% for the schemes, whose assets have been kept separate within the multi-scheme.
As of the end of September, their funding increased to 110.1% and 109.5%, respectively.
However, last month, SCA – the first multi-company scheme in the Netherlands – conceded that it may need to split up, as its sponsor company, SCA, has sold its packaging subsidiary to UK-based DS Smith.
As a pensions vehicle, the multi-scheme was established in 2010, providing smaller Dutch pension funds with a means of running similar schemes with a single board, but with ringfenced assets.
Earlier this year, state secretary Jetta Klijnsma said the API, the pensions vehicle for cross-border defined benefit plans, would succeed the multi-scheme.