Belgian pension fund body PensioPlus has reported that Belgian pension funds have generated average returns of 6% in 2017, against 5.06% in 2016.
Since 1985, annual investments returns amounted to 6.8% according to PensioPlus’ data.
Assets of the local pension funds have been primarily allocated to the fixed income segment (43%). Equity investments represented 38% of their allocation last year while real estate and cash accounted for 6% and 3% respectively. The remaining assets include pensions’ own funds and additional investments in infrastructure, insurance life contracts, convertible bonds.
PensioPlus warned that any further interest rate rise would harm future yield if the allocation of Belgian pension funds remains unchanged, given their preference towards fixed income.
The Belgian pension fund association also outlined the increasing number of foreign cross-border pension funds. Belgium now tallies 19 funds of this category managed for 24 different countries.
PensioPlus called for a quick implementation of European directive IORP II, that would support the growth of foreign cross-border pension funds in Belgium and enlarge the legal framework regulating them set in 2006 by the Belgian authorities.