NETHERLANDS - The €4.9bn TNT postal pension fund returned 16.8% on investments last year and has topped that up with an additional 6.6% earned during the first quarter of 2010, so there is no longer immediate pressure from a short-term recovery plan.
The scheme's cover ratio rose from 108% to 110% in the first three months of this year, and this rate already takes into account a five percentage point increase in life expectancy.
More importantly, the pension fund's cover ratio has held steady at over 105% for three consecutive quarters, so the postal pension fund is no longer constricted by its short-term recovery plan - based on a yearly return of 6% - which was anticipated to be in place until 2011.
The quick recovery has already allowed the scheme to grant compensation for inflation worth a quarter of its indexation ambition.
That said, TNT still has to focus on its long-term recovery plan, which requires the pension scheme to rebuild financial reserves equating to a funding ratio of at least 121%.
This increase in cover ratio was helped by the pension fund's 47.7% allocation to equities, which was the best performing asset class, as equities 32.1% in 2009 and 6.2% in the first three months of this year, according to the scheme's latest figures.
TNT's 38.5% holdings in fixed income also returned 13.1% last year and 3.2% in the first quarter, thanks to positive returns on both government and corporate bonds, it said.
While alternative investments in commodities and hedge funds generated a 16.5% return in 2009, the first three months of this year was less successful as alternatives lost 1.3% on the back of disappointing performance in commodities, the postal scheme said.
Its property investments also failed to produce a positive return as assets delivered -11.9% on investments in 2009 and -1.5% in Q1.
TNT's extensive hedge of its interest risk, through interest rate swaps and bond holdings, also contributed 2.8% to its quarterly results.
TNT delivers pension plans for 94,000 members, for its own staff and for staff of affiliated companies. At least 40,000 of these are active members.