Belgian pension funds obtained last year a 6% return, estimated on the basis of a representative sample of Professional Retirement Institutions (IRP).This is the highest return since 2014 according to calculations made by PensioPlus, the ASBL, which serves as IRPs’ umbrella. Last year’s real return, which takes inflation into consideration, amounted to 3.87%.In 2017, pension funds took advantage of both a strong economic growth, and a rather flexible central bank policy.
Both of these factors led to an increase of trading transactions and a constant low interest rate, according to PensioPlus.Uncertainty remains, however, for 2018, according to ASBL President, Philip Neyt. The Central European Bank policy is already less flexible, and the volatility of financial markets is increasing. “Seeing pension funds are invested at a level of 43% in stocks, one can predict that if the investment strategy remains unchanged, any interest increase could have a negative impact on future returns.” “We are betting on a maximal distribution of the assets,” insisted Mr. Neyt.
In the long term (25-30 years), the real return of Belgian pension funds is estimated at 4.4%. “It is essential for maintaining the purchasing power, remarked PensioPlus President. According to the European Insurance and Occupational Pensions Authority (EIOPA) semi-annual survey, Belgian pension funds are resilient to stress, and could fulfil their pension obligations up to 111%, even in the worst scenario.