NETHERLANDS - Dutch healthcare pension fund PGGM posted a 10.9% return on its investments in 2004 and saw its coverage ratio improve to 111%, up from 105% the previous year.
PGGM said its assets rose to e59.9bn with the performance putting the fund “ahead of schedule” in meeting the targets set in the recovery plan.
Commodities generated the best return (20.9%) and private equity (16.7%) and the fund said its strategy of hedging foreign currency risks in its investments made a “significant contribution” to the overall return. Currency hedging in 2004 amounted to e1.5bn or about 3% of the return.
PGGM said the rise in its cover ratio by 6% means that it currently has sufficient capital to pay the future pension benefits accrued by all participants.
The fund is aiming to reach the target cover ratio of 120% by 2012, ahead of schedule.
According to PGGM, the current focus on short-term certainty conflicts with the investment freedom needed for the longer term. The fund also sees tension developing between the collective pension concept and the desire for schemes tailored to individual requirements.
“PGGM’s response to the many uncertainties facing employees is to offer a solid, efficiently run pension fund that, being based on average salaries, with indexation in principle in line with sector salaries and opportunities to build up supplementary pensions via the Extra Pension scheme, is well equipped to deal with whatever the future may hold,” the fund said.
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Barnett Waddingham's head of business development Adrian Cooper has left the consultancy to join TPT Retirement Solutions in a newly-created role.