NETHERLANDS – Three top Dutch pension funds, ABP, PGGM and PME, have released double-digit returns for 2003 – with the data showing that coverage ratios have now recovered.
Coverage ratios were at the heart of controversial requirements from the Dutch pension supervisor, the PVK. The Pensioen- & Verzekeringskamer had caused outrage with a requirement that pension funds have a solvency ratio of at least 105%.
Civil service fund Stichting Pensioenfonds ABP said it returned 11%, with its coverage ratio up to 109% from 103%. The fund grew by 14.8 billion euros in the year, and is now worth 150.4 billion euros.
ABP’s investment director Jean Frijns said: “We are happy with the 2003 result.” He added the 11% return was above its minimum required return of seven percent a year.”
Meanwhile, healthcare fund PGGM returned 15%, with its coverage ratio at 105%. The fund grew from 49.7 billion euros to 52.9 billion euros as at the end of the fourth quarter.
“Following two years of negative returns, the financial year 2003 was an excellent year for PGGM’s investments, in particular the second and fourth quarter,” said Roderick Munsters, managing director of investments.
“In 2003 we were successful in maintaining our long-term investment policy of a well-diversified portfolio focused on real assets (equities, real estate, commodities are approximately 70% of total investments).”
Schiphol-based PME, Bedrijfstakpensioenfonds Metalektro – the pension fund for the metals industry, disclosed that it returned 13% in the year, taking it to 14 billion euros. The coverage ratio has risen to 109%.