HEERLEN, 19/01/07 - Pension fund ABP achieved a return on investments of 9.5 percent last year. As a result, the fund for civil servants and teachers boosted its assets to 209 billion euros.
ABP had the highest return, 36 percent, on its property investments. Investments in venture capital companies also did well with a return of nearly 30 percent. Shares had a positive result of 13.5 percent, while raw materials reversed into a negative return (18.5 percent) after several good years.
The coverage ratio, the degree to which the pension fund can meet its obligations, rose by 13.3 percentage points from 2005 to 133 percent. ABP expects that in "not too long a time" it will be able to offer full compensation for pay trends (indexation) in the government and education sectors.
ABP is to put more emphasis in its investment strategy on the long term. The fund managers want to invest more particularly in infrastructure, venture capital companies and hedge funds. The percentage of listed companies in its portfolio will "decline slightly," ABP said.
PGGM, the pension fund for the healthcare sector, saw its invested capital grow by 11 percent to over 81 billion euros. This was mainly thanks to "high yields on shares and property, which together comprise 58 percent of the investment mix," said PGGM. Due to the oil price decline, raw materials was the only category to post a negative return.
PGGM's coverage ratio rose, like ABP's, to 133 percent. That was 15 points higher than a year earlier. A coverage ratio of 130 percent was imposed by De Nederlandsche Bank (DNB) to repair capital following bad results in the past. In November, PGGM had already announced that pensions would be fully indexed again from January, meaning an increase in pensions of 1.86 percent.
PME, the metal sector pension fund, posted a rather low return on investments of 3.4 percent compared with 19.4 percent the previous year. This was due to increased long-term capital market interest rates, according to PME. The fund's coverage ration rose by 6 percentage points to 129 percent.
