SBZ, the €3.8bn pension fund for care insurers in the Netherlands, has said it is looking for employers to join the scheme to increase its scale.
In its annual report for 2013, the board said it was weighing its options for making its pension proposition more attractive to a larger group of companies.
It said it had already started adjusting its scheme to basic arrangements, offering choices to employers that have not signed the collective labour agreement (CAO) for care insurers.
Currently, SBZ provides pensions for 12,420 active participants, 7,000 pensioners and 20,405 deferred members affiliated with 53 employers.
Although the pension fund returned 3.3% on investments, it closed 2013 with a loss of 0.25%, following a loss of 2.7% on its 80% interest hedge, caused by increased interest rates.
In addition, it lost 0.9% on its dynamic investment strategy, after reducing the exposure to equity risk just before equity markets started picking up, it said.
However, also due to rising interest rates, the scheme’s liabilities fell by 2.4%, lifting its funding from 111.6% to 114%.
SBZ said it largely continued its defensive strategic asset allocation, adding that it decided to replace 5% of its euro-denominated government bonds with Dutch residential mortgages.
It also re-allocated part of its developed-market equity portfolio to defensive investments and started investing in the equities of small and medium-sized emerging markets.
Its 27% equity allocation returned 19.5% last year, with emerging market equities also outperforming their benchmark.
In contrast, the pension fund incurred a 3.1% loss on its 63% fixed income allocation, as a consequence of rising interest rates.
Combined alternative investments returned 4.75%.
The scheme pointed out that it was unable to specify respective returns yet, as its portfolios for indirect property, infrastructure and private equity are still under construction.
Earlier this year, SBZ decided to reduce its interest hedge to 70% and refrain from hedging the risk on emerging market currency, as it expects the currencies of fast-growing economies to appreciate.
It also said it opted for a one-tier board, with the non-executive members in the supervisory role, rather than continue with its board model of equal representation.
SBZ reported administration costs of €159 per participant, and 0.58% and 0.19% on asset management and transactions, respectively.