BPL Pensioen, the pension fund for Dutch workers in the agriculture and horticulture sectors, has sold all government bonds with a rating below AA-. The fund has taken the step to prevent excessive exposure to countries with relatively high government debt such as France and Italy.


At the end of last year, BPL invested some 20% of its total assets of €25bn in government bonds. In 2018, the fund had already sold its stakes in Spanish and Italian government debt, re-investing the proceeds in Dutch, French and German bonds.

The fund has now decided to part ways with its investment approach based on market capitalisation.

“Instead we have based the allocations to each country in the index on their gross domestic product and credit rating,” said Ivona Antonijevic of BPL’s management office.

As a result, the fund’s allocation to France, which has a credit rating of AA, has been reduced in favour of AAA-rated Dutch and German government bonds. The fund  has also upped its investments in supranational bonds including debt issued by the EU.

BPL Pensioen has excluded countries with a rating below AA- from its government bond portfolio.

Additionally, the pension fund is investigating how it can protect its funding ratio, which has risen above 120% this year (121.8% at the end of June), in the run-up to the switch to a defined contribution (DC) system.

“We are considering to increase our interest rate hedge from the current level of 37%,” according to the fund’s co-president Jack Buckens. The pension fund has already adapted its dynamic interest hedge: if interest rates were to decrease again from here, the hedge will not be lowered.

Millers fund to join BPL

Molenaars, the pension fund for millers, wants to liquidate and join BPL Pensioen by 1 January 2023, according to the fund’s annual report for 2021.

Molenaars is one of the smallest sector pension schemes in the Netherlands, with 12,000 members and €775m in assets under management.In 2020, the fund had already concluded it was too small to continue independently.

BPL has an ambition to grow by absorbing schemes from other sectors, according to Buckens, although it is currently not engaged in conversations with other schemes in addition to Molenaars.

“It could be the case that we are sufficiently large to continue independently in the new pension system, but if we can achieve economies of scale through non-organic growth, we are open for that,” Buckens added.

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