Credit crisis hits Dutch pension funds

Civil service pension fund ABP, one of the biggest in the world, said on Thursday that it had booked a negative return of 5.1% on its investments in the first six months of 2008.

Its return on shares was down 14.8% but the downturn was offset by a 44% gain on investments in commodities and in hedge funds (7.2%).
‘Our biggest concerns [for the future] are the stagnating economy and rising inflation,’ the Financieele Dagblad paper quoted ABP chairman Elco Brinkman as saying.
The lower investment return led to a decline in ABP’s coverage ratio – the ratio of assets compared with obligations. ABP’s coverage was 132% at the end of June, still above the 125% recommended by the Dutch central bank.
PFZW, the education sector’s pension fund, saw its return on investment down 2.7% in the first six months of the year. Its coverage ratio is now 143%, the NRC said.

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