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IPE special report May 2018

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Dutch transport scheme returns 1.6% in April, aided by hedge portfolios

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The €15.8bn Dutch transport pension fund, Vervoer, returned 1.6% in April, following a 6% yield during the first quarter of 2014. 

In the wake of a further drop in interest rates in April, the scheme’s 64.3% fixed income portfolio contributed 0.4 percentage points to the monthly result, the scheme said.

Its hedge of the interest risk on its liabilities and currency added 1 percentage point and 0.2 percentage points to the April return.

As the fall of interest rates caused an increase of liabilities, Vervoer’s coverage ratio dropped 0.4 percentage points to 112.3% in April.

During the first quarter, when interest rates also decreased, the pension fund’s holdings of fixed income and interest swaps, delivered more than 3%, it said.

Equity (26.7%), property (2.5%) and infrastructure (0.9%) returned 0.71%, 0.67% and 2% respectively during the first three months.

Vervoer noted that its funding at March-end would have been 109.3% without applying the three-month average, which has been the official discount rate during the past few years.

The transport scheme manages the pensions of 624,000 participants in total.

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