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IPE special report May 2018

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TNO scheme returns 17.5%

NETHERLANDS - The pension fund of technical research institute TNO has made returns on investments of almost 17.5%, it said in a statement on its provisional results.

The TNO scheme’s assets under management have risen to over €1.75bn, it added.

Due to the 2005’s results, the coverage ratio – based on the fixed accounting rate of 4% - is up from 115% to 127%. “The funding ratio based on the actual market rate has not yet been established, but will be approximately 122%,” the scheme’s controller H.G. Bogerd told IPE.

Given the improved funding ratio, the pensions regulator DNB has approved some indexation, the scheme indicated. There will be a repair indexation of 1.5% as of January 1 2004, a one-off payment of 1.8% over 2005 and an indexation of 1.1% over 2006.

Based on an asset liability study, the scheme’s board decided last year to limit the amount of equity to 6%. It decided that the percentage of equity would be linked to the coverage ratio.

As part of an improvement process TNO’s pension fund had attracted two investment experts in an advisory role, and had employed a ‘senior investment expert’ last year. In addition, the board had arranged monthly reports of management information on equity positions.

In order to avoiding the risk of unlimited supplementing of fund’s deficits, the sponsoring company will guarantee €15m per year at the moment, plus €10m per year, with a maximum of €50m over five years.

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