Rabobank agrees new terms with Syntrus Achmea

NETHERLANDS - The €11.7bn pension fund of Rabobank will maintain its contract with pension provider Syntrus Achmea, after agreeing new conditions for improved service.

One of the important conditions in this latest agreement is the Rabobank pension scheme will be given dedicated team within the provider, to solely assist the Rabobank pension fund, said Anton van den Brink, the scheme’s board secretary.

Both parties will also look at whether Syntrus Achmea’s new IT system - introduced after the provider’s recent move from Groningen to De Meern - is suited to its task.

Van den Brink said the contract has been extended indefinitely, though parties have agreed on clear exit conditions.

The Stichting Rabobank Pensioenfonds had earlier indicated that it was considering terminating its contract with the provider, and looking at whether to administer the scheme internally.

Syntrus Achmea will also continue to asset manager to the pension fund.

Elsewhere, a further breakdown has been provided of the scheme’s positive 10.4% performance last year - a gain achieved largely through the fund’s extensive hedge on currency, equity and interest rate risks.

The scheme replaced its swaption collars-based hedge in 2007, when its cover ratio was 160%, with a cover through equity-linked receiver swaptions, the Rabobank Pensioenfonds indicated in its annual report.

Without the new hedge, returns on investments would have been -16.2%, it said.

Fixed income, and government bonds in particular, was the best returning asset class last year, yielding 7%.

That said, the performance of fixed income still fell 0.6% short of the benchmark, because of “underperformance’ in the credit portfolio”, according to officials.

The Rabobank scheme also reported a 3.3% positive returns on direct property and 4.5% in liquid assets, such as cash, but there was less to cheer about in indirect real estate as the portfolio yielded -11.1%.

Returns on the 13.5% allocation to alternatives - introduced in recent years to improve the scheme’s risk-return profile - slumped a massive 22.2%, driven in part by infrastructure which yielded -9%, compared to its benchmark of 7.8%.

Equity was, of course, the worst performing asset class of the Rabobank pension fund, falling 1.3% short of its benchmark and losing 42.5% on investments.

Officials attributed the negative result to the relatively large allocation to cheap equity “which dropped more than average”, according to officials.

The scheme’s strategic investment mix in 2008 consisted of 39% in fixed income, 36.5% in equities and 10% in property.

The Rabobank Pensioenfonds has 46,320 active participants, 36,830 deferred members and 10,245 pensioners, who were granted a 1.86% indexation based on the consumers’ index.

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