NETHERLANDS - Ahold, the Dutch retailer, has decided to pay an extra e13m to its pension fund this year to help mitigate losses sustained in the equity portfolio.
The e1.3bn pension fund of sustained losses of 12.9% for the year ended 31 December 2002. Losses were incurred largely due to the fund’s 50% allocation to equities which suffered losses of 27.3%. Ahold maintains that because of its low pensions obligations it can afford a greater allocation to equities.
Alternative investments was another weak performer, down 19.9%. Alternative accounts for 2.5% of the fund’s total assets.
Fixed income investments yielded 6.7% and real estate 6.4% which account for allocations of 40% and 7.5% respectively.
At the end of 2002, the fund was 105% funded which meant it was exempt from decreasing the indexation rate, as dictated by Dutch law. The retailer is also therefore not obligated to top up the fund.
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