NETHERLANDS - Market turmoil and falling interest rates caused the financial position of the €2.7bn pension fund PNO Media to deteriorate by 5.8% during the first quarter, the scheme's Q1 financial results reveal.
The scheme's overall negative return on investments was -4.6%, and PNO Media's liabilities rose by 3.3% because of the decreasing long-term interest rates, it stated.
As a result, the scheme's cover ratio dropped by over 7% to 114.5% by the end of March.
Positive returns on equity and interest rate derivatives of 1.2% and 0.7% respectively helped cushion the overall impact, according to officials, as it has been hedging part of its equity and interest rate risk since 2005.
However, PNO Media's investments in equity and fixed income generated negative returns of -15.4% and -0.8% respectively during the first quarter.
Although equities performed 0.8% better than the benchmark, fixed income underperformed by 1.3%, mainly because of European corporate bonds saw disappointing returns on the back of the credit crisis, scheme officials argued.
Commodities was the best performing asset class with a return of 1.3%, followed by private equity which returned 0.8%. Property and infrastructure also yielded 0.5% and 0.1% respectively.
Approximately 39.6% of PNO Media's assets were invested in fixed income during that time, while equity counted for 37.9% of the portfolio. Elsewhere, investments in real estate, private equity, infrastructure and commodities were 14.4%, 6.8%, 0.5% and 0.8% respectively.
The pension fund has also announced a new website will communicate its SRI policy to its participants.
During the first quarter, the scheme introduced a new SRI code and added 11 arms manufacturers and 9 companies in fur-related products to its exclusion list.
Furthermore, it appointed Hermes Equity Ownership services as its researcher on SRI issues and as adviser on voting
The industry-wide scheme has 15,470 active participants, 13,325 deferred members and 6,025 pensioners. It has 359 affiliated employers.