Pensioenfonds ING, the fund for employees of Dutch multinational banking group ING, saw its market value coverage ratio increase by 3.6 percentage points in Q2 2020, to 118.5 per cent, its quarterly report has revealed.

However, its DNB policy funding ratio declined by 3.3 percentage points during the quarter to 128.1 per cent, while its average real coverage ratio fell by 1.6 percentage points to 94.5 per cent.

The fund’s investment return during Q2 was 5.9 per cent, with the value of its investments increasing by €1.6bn, in comparison to Q1, to €30.1bn.

Pension liabilities also increased over the quarter, by €0.6bn to €25.2bn, which Pensioenfonds ING said was primarily driven by the lower interest rate.

The fund’s return on the matching portfolio was 5.6 per cent in Q2 2020, while its half year return was 5.7 per cent.

Its treasury portfolio return was -0.1 per cent in Q2 and 0.1 per cent for the half year, while the return on its return portfolio was 7.6 per cent in Q2.

The private equity portfolio returned -6.6 per cent over the second quarter and -4.4 per cent in the first half of the year.

Pensioenfonds ING’s report stated: “The second quarter of 2020 was dominated by the lockdowns in many countries as a result of the coronavirus.

“Central banks succeeded in removing much of the turmoil in the financial markets. In all Western countries, governments limited the economic downturn with direct financial support to businesses and households.

“By the end of the quarter, relaxation of lockdowns allowed public life to gradually resume.

“However, the uncertainties remained great. First, about possible new outbreaks of the virus. Even without a lockdown, a low level of confidence can depress the economic recovery, even if the support measures are extended.

“Despite the fact that the acute stress on the financial markets has eased, the uncertainties continue to dominate the financial markets.”

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