ABP and PFZW, the two largest pension schemes in the Netherlands, presented their results yesterday for the second quarter of 2012. Both schemes showed positive, if not marginal, returns

The civil service scheme ABP announced that returns on investment amounted to 0,8% (€1.9bn) for the quarter ending 30 June and revealed that assets had increased by €3bn to a total value of €242bn. This makes ABP the third largest pension scheme in the world.

The coverage ratio, the ratio between assets and liabilities which according to Dutch law should be 105% or higher, remained steady for the scheme at 112%. The same as at the end of Q1.

"In an increasingly volatile financial market ABP has been able to make a small positive return on investments and the coverage ratio has remained stable in the second quarter," said ABP's vice-chairman Joop van Lunteren in a statement.

The valuation of the scheme's liabilities has increased by €3bn compared with Q1. ABP has 2.8 million members and its total liabilities are now valued at €217bn. The increase has been caused by a changing interest rate that the scheme has to apply for the calculation of the liabilities.

PFZW announced that its returns on investments were 0.4% for Q2. In a statement the scheme said it had low equity returns due to continued concerns about a new recession in Europe which brought an unstable market and consequently interest rate.

The scheme's coverage ratio, despite a drop of 1% compared to last quarter, is currently still a healthy 110%.

Peter Borgdorff, director at PFZW, said: "Despite an unsteady market and continuing insecurity on the financial markets we have still managed to get a small but positive return."

With these results for Q2 the returns for the first six months of this year for PFZW amount to 0.8%. The schemes assets as of 30 June totalled €101.9bn.

For ABP the return on investments of 0.8% for Q2 means that the return on investment for the first half of 2011 comes to 1.7% (€4bn).

Not all the building blocks of the portfolio contributed to the positive returns in Q2,however. The value of the scheme's commodities allocation was down 5.2%, shares in emerging markets lost 3.3% and ABP's Opportunity Fund was down 1.9%.

Vice-chairman Xander den Uyl pointed out in a statement that the spread of ABP's investments, which covers a very broad variety of asset classes, has shown that although each has its own risks the diversity of the portfolio "proves its value here".

ABP also reports that the cumulative return on its portfolio remained stable in comparison to Q1 at 7% and that the cumulative real return reached 4.9%. This is 1.6 percentage points higher than the prudent real return used for calculation in establishing the pension premium.

azeevalkink@wilmington.co.uk 

First published 22.07.2011