Dutch pension fund ABP has released its third quarterly report of 2010, which showed that its coverage ratio stands at 94%, which is 1% less than at the end of the second quarter.

According to its recovery plan, ABP’s coverage ratio needs to be 96% at the end of the year. If this is not the case, the board will look at which additional measures ABP needs to take on top of the measures stated in the recovery plan. This could mean that the contributions are temporarily raised further or that, as a last resort, pension rights are reduced.

In the first nine months of 2010, the ABP investment portfolio achieved a return of 10.5%. In the third quarter the real assets made the greatest contributions to the returns, mainly because of the equities in developed markets and real estate. Although ABP’s assets increased considerably, the returns could not compensate for the effect of the low interest rate on the valuation of the liabilities, which are EUR 246 billion at the moment.

Stichting Pensioenfonds ABP is the industry-wide pension fund for employers and employees in government and educational institutions in the Netherlands. It has 2.8 million clients and invested capital amounting to over EUR 231 billion, making it one of the three largest pension funds in the world.

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