Pension funds have bad quarter behind – Yahoo! News

The large Dutch pension funds have lost in the second quarter billions with their investments, because it was very turbulent on the stock markets.

A combination of significant adjustments in the bond markets, uncertainty over interest rate policy and fears of a ‘Grexit’ portfolios of funds hit hard.

largest Dutch pension fund ABP achieved a negative investment return of 4.3 percent. The officials fund lost more than 16 billion euros. With Care Fund PFZW plunged the yield by 6.6 percent in the red. This decreased invested assets by 11.5 billion euros.

Metal Funds PMT and PME saw their investment portfolios with respectively 8.3 and 7.2 percent in value bags, with bpfBouw decreased capacity by 9.9 percent .

“The rate rises again a bit and we are happy with it, because rising interest rates mean lower commitments, ” said PFZW director Peter Borgdorff Friday in a statement.” The downside of rising interest rates A loss on our investment in bonds and interest rate hedging. ”

7 million Dutch
The five funds, which together manage the pension funds for more than 7 million Dutch there were already financially not so good. Therefore, they had to start this month to submit a recovery plan to DNB. Last quarter, the fund saw their so-called policy coverage deteriorate further. That gauge indicates how much money a fund to meet all future pension

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ABP decreased The policy coverage ratio slightly to 101.3 percent, which is below the legal minimum. ABP believes that the policy coverage this year “under the measure will continue.” Higher interest does ABP have less cash in hand as a buffer for the future. How many? No less than EUR 44 billion.

The discount rate to be used by the funds increased in the last quarter from 1.3% to 2%.

PFZW went policy coverage slightly harder slicing to 102 percent . PMT saw its coverage to fall to 101.7 percent, 101.1 percent to PME. In bpfBouw the coverage also fell, but this is by 114.1 percent more on a higher level.

The numbers actually give a rosy picture. De Nederlandsche Bank (DNB) conducted earlier this week by a change in the method by which the funds must calculate their coverage. It does not work yet in these quarterly figures, but the adjustment pull the cover ratio of the funds coming years an annual average of about 2 to 3 percentage points down.

The funds will have to increase their buffers so even further, making indexation (increase) in pensions further touches from image and premiums may be increased.