Stichting Pensioenfonds PostNL’s funding ratio increased to 123.8 per cent at the end of September up from 122.7 per cent at the end of June, it has revealed.

Publishing its results for the Q3, it also revealed that at the end of its September its policy funding ratio, which is the average funding ratio over a 12-month period, increased to 117.1 per cent from 112.6 per cent at the end of Q2 in June.

PostNL said the increase in the coverage ratio was caused by a positive return on investments of 0.6 per cent including interest rate hedging, with a positive effect of 0.8 percentage points on the coverage ratio.

Commenting, Stichting Pensioenfonds PostNL chairman of the board, René van de Kieft, said: “Both the current funding ratio and the policy funding ratio increased further in the third quarter. As a result, the fund is out of recovery at the end of September. The policy funding ratio is above 110 per cent, bringing (partial) indexation closer. The reference date for this is November 30. The reason for the increase is the good investment returns on shares and real estate. Interest rates also rose slightly in the third quarter, which had a positive effect on the funding ratio.”

The pension fund also explained that its matching portfolio, consisting of government bonds and interest rate swaps, which aims to (partially) mitigate the effect of interest rate changes on the funding ratio had a 0.0% impact on the current funding ratio.

In regards to equities, the pension fund said developed countries continued their gains this quarter, with returns between 2-3 per cent across the board. However, unrest in China led to a negative result on equities in emerging countries. Real estate produced a positive result but agricultural land lost a little bit.

Despite an increase in interest rates, fixed-income securities had a good quarter across the board; high-yield corporate bonds performed best, with a return of around 2 per cent. This is due to the fact that these bonds are more sensitive to equity sentiment than to interest rates, the fund said.

However, the fund warned that concerns about inflation are increasing. In the US, personal consumption expenditure (PCE) inflation – the figure that the central bank (Fed) is targeting – crept up further in August to 4.3 per cent. In the eurozone, price inflation rose to 3.4 per cent in September and core inflation to 1.9 per cent.

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