NETHERLANDS - The €2.5bn Horeca & Catering pension fund is continuing with its asset allocation diversification plan despite a recent further fall in its cover ratio, and has awarded RCM a mandate to manage European small cap equities.
A statement issued by the pension fund today said Allianz Global Investor’s RCM division will manage a €32.5m European small caps active equity allocation as part of its outsourced investment management strategy, taking the number of investment houses looking after its assets to 14.
A spokesman for the pension fund to the Dutch hospitality and catering trade said it is continuing with the asset allocation strategy set out in April 2008 - to hold 50% equities, 40% in fixed income and 10% in property but diversify 3% of its assets into small- to mid-cap equities - and said he anticipated the fund will allocate the remaining 1.5% in small caps equities to a US small cap manager next month.
This latest development follows news sent to the pension fund’s members and participants recently stating the pension fund had seen its cover ratio drop from “less than 100%” on 27 October 2008 to 82% by 28 February 2009.
More specifically, the fund has not changed the recovery plan it presented to pensions regulator, De Nederlandsche Bank (DNB), in December 2008 but has now extended the recovery period from three to five years, as allowed under recent changes granted by social affairs minister Piet Donner.
Following RCM’s appointment, the Horeca pension fund’s investments are now diversified and managed by:
Allianz Global Investors; Acadian Asset Management; AlpInvest Partners NV; BlackRock; Cohen & Steers Capital Management; F&C; Goldman Sachs Private Equity Group; HarbourVest Partners; Syntrus Achmea Vastgoed; T.Rowe Price Global Investments Services Ltd, and Western Asset Management Ltd.
Horeca currently collects approximately €220m in pension contributions each year from its 785,000 participants and pays out €36m to pensioners and dependents. However, there will be no additional payments from employers until 2011, under the current agreement, along with no indexation for the foreseeable future, while the fund seeks to improve its cover ratio.
The fund will be consulting participants over the coming months, but emphasised in its explanation of the recovery plan that it has a higher number of young participants than many other pension funds which benefits its asset allocation and risk strategy.
Its cover ratio had been 148% at the end of 2007.
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