TNT doubles pension premiums to deliver security
NETHERLANDS - TNT, the Dutch postal service, almost doubled the employer contribution into its pension fund starting from April, in a bid to improve the cover ratio of its pension scheme.
Details of the pension fund's second quarter results stated part of its recovery plan approved by pensions regulator De Nederlandsche Bank is the employer has raised contributions from 20.8% to 39.2%.
This should help to support the pension fund which has seen improved investment performance over recent months, according to the Q2 update, as the fund's cover ratio has increased since April from 89% to 100% of assets required to meet liabilities.
The pension plan has benefited somewhat from the change in interest rates as this has lowered obligations and moved the €4bn in assets under management closer to the 105% cover ratio target.
To achieve that, the pension fund has seen gains from its 42.2% holding in equities as shares have so far generated a 7.4% positive return, alongside the 5% gain achieved through a 41% allocation to fixed income.
Much of this gain came from improvements in the emerging markets and corporate bonds markets, according to the TNT pension fund, as both sectors yielded 10/8% and 8.3% respectively in the three months to the end of June.
Real estate, however, took another tumble as European, and to a lesser extent Asian unlisted, as 10.5% in property investments fell 7.5% in the first six months of this year.
In contrast, the 5.9% holding in alternative investments generated 8.4% in the first half, driven in the main by commodities, suggested TNT.
The TNT pension fund has approximately 91,000 participants, of which 41,600 are active.
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