NETHERLANDS - The pension fund for medical consultants (SPMS) saw its assets increase by €0.5bn to €5.6bn on the back of a return of 14% last year, outperforming its benchmark by 2.5 percentage points.
However, its coverage ratio rose no more than 1 percentage point to 111%, mainly due to decreasing long-term interest rates, as well as an additional provision for increased longevity, according to its annual report for 2010.
Equity was the best performing asset class, generating 20%.
With an absolute return of 12% and an outperformance of 4 percentage points, fixed income - and non-government bonds in particular - also performed well.
It pointed out that it has divested government bonds and related derivatives of the PIIGS countries in spring of last year, and that it has refocused on government bonds of Germany and the Netherlands.
SPMS further said that it has doubled the strategic equity allocation to emerging markets to 25%.
It has also reduced its property allocation from 15% to 10% and evenly re-invested the freed up assets into equity and fixed income.
The occupation scheme again granted its unconditional 3% indexation on 1 January 2011.
At year-end, SPMS's funding ratio was 7 percentage points higher than its minimum required funding of 104%, which had to be reached by 2013.
According Jeroen Steenvoorden, director, the scheme's required financial buffers - equating to a coverage of 124% ¬- could be reached within five years, rather than 2023 as mapped out in its long-term recovery plan.
Meanwhile, the funding ratio of the consultants scheme has risen to 114% during the first six months of 2011.
In 2010, SPMS swapped its long-time provider Doctors Pension Fund Services (DPFS) for asset manager APG, fiduciary manager BlackRock and Aviva as manager of its unlisted property.
The scheme said the change followed the "need for benefits of scale, more expertise and an increased focus on risk management".
It also made clear that the occupational pension association (BPMS) had decided to increase the future pension accrual by one-third to improve the current basic pension arrangements.
The participants have been offered a one-off opt-out, as they have already concluded third-pillar pension arrangements, SPMS said.