As a pension fund, we invest in pension assets in order to be able to pay pensions, both now and in the future. Investing involves risks. We like to keep these risks as limited as possible. That is why we perform ‘de risking’ at our pension fund. This is a difficult pension term. We do not invest the pension money ourselves. This is done through an investment company. In the past, we worked with several investment companies. We sat down with Bernhard Schmid, chair of the Investment Committee, to learn more about this.
De risking is all about reducing risks
‘De risking literally means reducing risks. We invest in the safest way possible. We need the returns on investments in order to meet our obligations: paying pensions. We also protect pensions against fluctuations in the financial market.’
Why less risk?
‘Our pension fund is in good financial shape. Of course, we want to keep it that way. Taking large investment risks is no longer necessary. We have sufficient reserves to withstand financial fluctuations. Apart from a few expiring exceptions, we now only invest in fixed income securities. These are, for example, investments in long term loans. We are increasingly reducing risk. This approach fits well with the composition of our participant base.’
Do participants notice anything?
‘It gives the participant safety and security. Even if there is a sudden drop in the stock market or interest rates, our financial position remains stable. We are also less dependent on Dow.’
From multiple to one main investor
‘In order to execute the investments, we worked with multiple investors. There are challenges in working with multiple investors. Think, for example, of monitoring the agreed practices and results. The more investors there are, the greater the risk. That is why we made the choice to work with only one main investor; Neuberger Berman.’
Confidence in the future
‘By reducing risks and working with Neuberger Berman, the Board is confident about the future. This allows us to fulfill our pension promise to participants. And that is exactly what we are here for.’
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About Neuberger Berman
‘After a comprehensive selection process, investor Neuberger Berman was chosen as the best partner. The Board fully supports the partnership with this party for our pension fund. Neuberger Berman (NB) is a private, independent asset manager. They invest our pension funds according to our socially responsible investment policy. Thus, they are focused on achieving the best possible investment results for our fund. NB is a top asset manager. They continuously monitor the investments and inform us about the results at all times. As a pension fund, this gives us the confidence that your pension money is being optimally managed.’ |