GERMANY – Industrial group Siemens has continued to reduce the shortfall to its 14.9 billion-euro pension fund, and has increased its allocation to equities.

According to Siemens’ quarterly report, at the end of June this year the total scheme was underfunded by 4.5 billion euros, down from five billion euros at the end of last September. Since this period, Siemens has been injecting both its German and UK schemes with cash.

In October last year, supplementary contributions were made to the German Pension Trust totalling 635 million euros, comprising 377 million euros in real estate, and 259 million euros in cash. A supplementary cash contribution of 184 million euros was also made in October 2002 to the UK pension plan. Regular funding during the nine-month period ended June 30 this year amounted to 147 million euros.

The investment return for the Siemens German Pension Trust since the end of last September is 6.9%, amounting to 617 million euros. The foreign plans, which comprise 5.8 million euros of the total returned 14% - 522 million euros.

In terms of asset allocation, the proportion of equities has recently been increased from eight percent to 23%, although current investment strategy is “generally biased towards high quality government and selected corporate bonds”.

Fixed income now accounts for 63% of all plan assets, real estate accounts for 10% and cash 4%. “Future investment decisions will be determined in consideration of market developments,” says Siemens.