SPAIN - The Bilbao-based Elkarkidetza, the pension fund for Basque Country provincial and local government employees, has cut its equity exposure from 32% to 15% this year amid market turmoil.

Almaia Aldasoro, executive vice president of the organisation, said during a conference by the European Association of Paritarian Institutions of Social Protection (AEIP) in Brussels today: "Our present allocation is 15% to equity, and I have to say that is unusual, because we have always had around 30%. But the stock markets helped us this year in obtaining this low allocation."

Aldasoro told IPE the fund had decided to cut its allocation from its 32% at the end of 2007 amid fears of equity risks, in favour of an increased allocation to cash and fixed income.

The fund has now holds 50% of its assets in fixed income, 15% in cash, and 16% in real estate and venture capital, said Aldasoro.

Pension fund representatives of collective territorial scheme gathered in Brussels today at the conference, co-organised by the European Association of Public Sector Pension Institutions (EAPSPI), to discuss territorial and regional social protection in Europe.

In a roundtable discussion on the topic, Aldasoro explained the benefits of a territorial scheme: "Our relation with the citizens is much closer, thanks to this advantage, the needs are much more easily noticed and understood."

She concluded: "It helps us to offer them services, it is much more customised and tailored and much more easily targeted. At the same time, the relationship with the Basque authorities is much closer than with the Spanish [authorities]."