NAEV reaches required actuarial rate

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  • NAEV reaches required actuarial rate

GERMANY - Nordrheinische Ärzteversorgung (NAEV), the German doctors’ pension fund, has managed to reach the required actuarial rate of 4%, IPE has learned.

Dirk Lepelmeier, managing director at NAEV, confirmed the €8.8bn fund (up from €8.6bn at the end of 2007) will just scrape the 4% “hurdle rate”, having reported an actuarial rate of 7.27% the year before.

“This is possible because of our 2008 return and because of excellent results in past years,” he noted.

The fund significantly reduced its equity exposure last year from “a double-digit figure” to around 5% by the end of the year.

Lepelmeier explained the funds withdrawn from equity investments were redirected into the fund’s bond portfolio, and largely into so-called Schuldscheine and Namenspapiere, with a hold-to-maturity strategy.

He added the fund will not have to make any write-downs from these investments under German accounting standards should interest rates eventually rise.

The fund’s exposure to alternatives was mainly in fund-of-hedge-funds and remains at 2-3% of asset allocation.

And when it comes to restoring the fund to its former equity exposure, Lepelmeier noted this will now depend on how much risk capital the fund has, which will in turn depend on how its real estate and bond portfolios are doing.

“We have managed to get through the winter quite well because we have been able to put on some fat during previous years” he said.

“But looking forward, investors who are drawing up balance sheets annually and who are closely supervised and therefore have very rigid risk-capital-driven asset allocations will only recover slowly so will require stamina,” continued Lepelmeier.

Elsewhere, Rauser Towers Perrin has matched the findings of Watson Wyatt Heissmann, which show German retirement vehicles in DAX30 companies have managed the crisis reasonably well. (See earlier IPE article: German pensions ‘comparatively sound’ - WWH)

Both RTP and WWH have published their final studies into DAX30 companies’ pension schemes and while calculation methods differ slightly the results are very similar.

While RTP estimated there had been a 9% drop in pensions liabilities to €191bn, WWH said it amounted to an 8.4% drop to €194bn.

Assets also decreased by €13bn to €125bn, according to RTP, while WWH said assets dropped by €22bn to €125bn.

“The trend to outsource pension assets was slowed down for the first time last year - but it remains unbroken,” claimed RTP in a statement.

The consultancy added the retirement vehicles’ average equity exposure decreased from 32.4% to 21% while cash positions increased and bonds continued to make up the largest part of investments at 51%.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email

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