Investment Policy

The Board of Directors of Pension Fund PNO Media has adopted an integrated policy. As such, the pension policy, the indexation policy, the financing policy, the recovery plan and the investment policy combine to create a coherent whole.

Within this framework, the investment policy, together with the other financial elements are analysed on an annual basis under a range of economic scenarios. An important tool used for this type of analysis is the Asset Liability Management study, also called the ALM study, in which the development of the fund’s investments and liabilities are considered both on an individual basis and as a combined whole.

Objectives of the investment policy

The principle aim of the investment policy is that the risk that pension payments need to be reduced should not be greater than what is considered to be socially applicable. From an investment perspective, this means that the risk of the coverage ratio falling below 100% should not exceed 2.5%. This situation has now arisen. Because the fund is now underfunded, it is not possible to implement an investment strategy in line with the policy outlined above. Pension Funds PNO Media have therefore chosen to reformulate the main principles of the policy. The risk of the coverage ratio dropping below 100% currently exceeds 2.5% and there are no realistic measures that would limit this risk in combination with a significant indexation over the foreseeable future. Our policy is therefore to return within a 15-year timeframe to a financial position where the risk of the coverage ration falling below 100% coverage ratio is again lower than 2.5%, and also to significantly increase pensions over that period.

As soon as the fund once again exceeds the desired coverage ratio the policy with regard to the risk of underfunding as described above shall reapply.

Adoption of the investment policy

The pension fund’s Board of Directors are responsible for the Fund’s strategic investment policy. The strategic investment policy sets out:

•    the investment policy’s objective;
•    the determination of the strategic investment portfolio and the ranges;
•    how the derivatives policy and the currency policy will be adopted.

The Board of Directors are advised by the investment advisory committee with regards to the management of the investment policy and the manner in which this policy is implemented.

Within the policy framework established by the Board of Directors, the management are responsible for the implementation of the investment policy. The activities related to implementing the policy include:

  1. preparing and advising on the investment policy to be pursued on behalf of the Board of Directors;
  2. tactical asset allocation, including the determining the optimal allocation between asset classes, which includes equities, fixed-income securities, and alternative investments as established by the Board of Directors;
  3. the appointment of asset managers;
  4. the supervision of the implementation of the asset management by any asset managers.

Within the asset management organisation, the management, supervisory and registration functions are strictly separated.

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