Pensioenfonds Metaal & Techniek, The Hague, Netherlands, reported investment returns of 4.8% in the second quarter and 12.7% for six months ended June 30, the pension fund said on its website.
PMT's assets as of June 30 stood at €80.5 billion ($90.4 billion), up 13% from €71 billion on March 31, lifted by a jump in the value of fixed-interest securities and a slight increase in the value of equities, high-yield investments and real estate.
A return of 7.1% was recorded by PMT on its matching, or fixed-income, portfolio in the quarter due to lower interest rates. In the previous quarter, PMT recorded a 6.4% return.
The gain on the return, or growth, portfolio — composed of real estate, high yield, equity and private equity investments — was 2.6% in the quarter, down from 8.6% in the previous quarter.
PMT warned that under the new Dutch political agreement, plan participants' benefits could be reduced in 2020 due to pension fund ratio falling under a 100.8% target. The amount of possible reduction will become clear after Dec. 31, PMT said.
"It cannot be the case that the political commitment to lower (pension cutbacks) due to recent developments in the financial markets has disappeared. Decreasing does not fit in with the new pension agreement, our participants think," PMT Chairman Benne van Popta said in a news release.
On June 5, Parliament, employers and trade unions agreed in principle to the reform of the Dutch pension system.
The state retirement age will remain at 66 years, 4 months until 2024, when it is set to increase to 67. After that, the state retirement age will continue to increase by two months for every three-month increase in the life-expectancy rate.
The government also agreed with plan sponsors and unions for some tolerance on the 105% funding requirement. According to the agreement, cutbacks won't be made as long as the funding ratio is above 100% for five consecutive years.