I hope you are well. COVID-19 has forced many of us to live in a "lockdown" situation. We must stay at home unless... This means that even PDN is being managed from home. And, to be honest, this is going pretty well after a few days of getting used to the situation. Even DPS is working fully from home as of March 2. If you call or email the Pension Desk, you will speak with employees working from home. Investors are doing their work from home, and management meetings are taking place via video meeting platforms. We really are online!
This week, we held our first online annual meeting. The annual meeting is always a special gathering during which we reflect on the recently concluded year. The accountability body and the Supervisory Board give their opinion on the choices made. Overall, there is a general sense of satisfaction with the 12.7% earned investment return. Due to the decrease in the interest rate, the funding level has unfortunately not improved but was 104% at the end of 2019. This is somewhat disappointing. Thankfully, however, we do not need to cut back in 2020.
The feeling of satisfaction with the earned investment return was short-lived. The pandemic brought about large movements in the financial markets, which reduced the funding level of our fund to 92%. Even though you would be correct in noting that the pension fund is a long-term investor, this low funding level is unique for PDN. This will have no consequences for the payments in 2020. But it does feel as if, from one moment to the next, we have landed in a world with great uncertainties. Will the pandemic develop into a temporary recession or a new crisis? Managing under these circumstances is, as Prime Minister Mark Rutte says, “Making 100% decisions with only 50% of the information.” Guarantees for the future can simply not be given.
I hope that all of you remain healthy.
Gerard Rutten
DSM Pension Services