Belgium
Brussels, 29 January 2010

Mercer’s research is based on an analysis of 90 active funds, which represent 60% of the 150 active funds in Belgium.

Based on about half of this sample, Belgian pension funds delivered a median return of 18.5% over the year 2009, according to Mercer’s Pension Investment Performance Survey (PIPS). 

Willy Santermans, Principal at Mercer, commented: “After a dreadful year 2008 with a median equal to minus 25.2%, the ride downhill continued in the opening quarter of 2009. As of the second quarter, markets finally started to recover.

Over the year 2009, pension funds have broadly maintained their asset allocation: the percentage invested in equities increased by 7.7% while the percentage invested in bonds decreased by 4.0%. The major part of the shift is to be explained by the difference in return, so after correcting for such difference, we actually observe a slight shift from short term to equities.
 

“Pension funds are long term investors” further commented Santermans”, and from this perspective, performance have been rather disappointing. The average annual return over the last 5 years was +2.6%,  +1,0% over 10 years, +5.9% over 15 year and +5.7% over 20 years”.

“Let me stress that the returns presented above are “median” fund returns which only give a broad insight in the Belgian fund performance over the year 2009”, comments Thierry Laloux, Retirement Business Leader. “Returns per individual fund vary significantly as not all funds have the same approach towards risk taking (equity exposure) and much depends on the added value the asset manager has brought. The recent “market crash” clearly shows that a pension fund board who wants to be “fully in control” has to set it’s strategic and tactical “risk budget” and afterwards translate these into it’s strategic and tactical asset allocations (percentages and allowed deviations) these should be accompanied with clear reference market indices (<benchmarks>) per asset class to create a full transparent relationship with your asset manager”.

About Mercer

Mercer is a leading global provider of consulting, outsourcing and investment services, with more than 25,000 clients worldwide. Mercer consultants help clients design and manage health, retirement and other benefits and optimize human capital. The firm also provides customized administration, technology and total benefit outsourcing solutions. Mercer’s investment services include global leadership in investment consulting and multi-manager investment management.

Mercer’s global network of more than 18,000 employees, based in over 40 countries, ensures integrated, worldwide solutions. Our consultants work with clients to develop solutions that address global and country-specific challenges and opportunities. Mercer is experienced in assisting both major and growing, mid-size companies.

Mercer (Belgium) was set up in 1977 and employs more than 75 people, including consultants, actuaries, analysts and benefit plan administrators.

Website: www.mercer.be