The employer pays the pension premiums to the pension fund. The pension fund invests the premiums as beneficially as possible. ABN AMRO Pension Fund’s investment policy aims to secure the pensions and generate returns adequate enough to ensure we are able to annually adjust the pensions for price increases (grants of indexation).

Please read more about the investment policy principles below.

We spread the risks in our investments
The risk is spread by splitting the investment portfolio into two components:

1. Matching portfolio
The purpose of the matching portfolio is to generate returns equal to the value of the pensions we will be required to pay out, now and in the future. The value of the pensions are influenced by interest rate changes. The risk of the investments in this portfolio is limited. We invest in bonds and interest swaps.

2. Return portfolio
The purpose of the return portfolio is to generate returns that will enable us to annually raise the pensions (indexation). The risk on these investments is higher. We invest in shares, property and corporate bonds.

We have a dynamic investment policy
The extent of risk we are willing to incur with our investments depends on our funding ratio. At a lower funding ratio, we take lower risks, investing more in the matching portfolio. A higher funding ratio allows taking higher risks, investing more in the return portfolio. At predetermined times of the year, we can adjust the distribution over these two portfolios.

Process
The Board annually decides on how to invest. The Board considers:

  • studies of the Asset Management department
  • advice from internal and external advisors.

    The Asset Management department subsequently implements the investment policy.

    Implementation
    We have various external asset managers investing the funds for us. We conclude contracts with each of these asset managers for the management of a portion of the investment portfolio. We subsequently ensure that all asset managers actually comply with the agreements made.
     

Socially Responsible Investment
The ABN AMRO Pension Fund has a policy for socially responsible investment. This policy aims to contribute to an adequate and reliable pension for our participants in the long run. The pension fund implements the Socially Responsible Investment policy in various ways:

Periodical screening of companies in which we invest.
We screen for activities that we feel are not acceptable, such as child labour, violation of human rights, corruption and the production of controversial weapons (chemical and biological weapons, cluster bombs and anti-personnel mines). Companies with such activities are excluded.

Ensuring our voice is heard at shareholder meetings.
As a shareholder, the pension fund has voting rights at shareholder meetings. By ensuring our voice is heard, the pension fund can exercise influence on the management quality of companies in which it holds shares. If you want to know more about our voting policy, please read the page ‘What is our voting policy?’

Complete value analysis
The external asset managers who are working for the pension fund have to apply the rules for socially responsible investment while selecting the investments. We apply complete value analysis regarding property investments.

Engagement

The pension fund addresses responsibilities concerning durability to those companies we invest in. The goal is to achieve improvements regarding durability. To monitor this, the pension fund has appointed a specialized engagement manager.


Please find more information on our Socially Responsible Investment policy in the Policy Plan for Socially Responsible Investment.

Voting policy
The ABN AMRO pension fund invests, among other things, in shares. As a shareholder, the pension fund has voting rights at shareholder meetings. By ensuring our voice is heard, the pension fund can exercise influence on the management quality of companies in which it holds shares. The board of our pension fund does not vote personally. A specialist external agency does this at the fund’s instructions. The board recorded guidelines on how to vote on the pension fund’s behalf in a document.

Who votes for us?
On January 1st 2009, we transferred the execution of our voting policy to an external specialist agency.

In which companies do we vote?
We vote at all shareholder meetings of listed companies in which we possess individual shares. We voted at 1,808 shareholder meetings in 2016. That is nearly 100% of the total number of shareholder meetings in which the pension fund was entitled to vote.

Voting by proxy or dialogue?
We vote by proxy. A specialist external agency votes on our behalf at shareholder meetings.

What is our voting behaviour?
The pension fund checks voting behaviour based on reports from the specialist agency voting on behalf of the pension fund.

Investment returns
The investment returns are dependent on the development of the financial markets. Over the past decade, we achieved an average yield of about 9.2% annually.

The total assets of ABN AMRO pension fund amounted to EUR 26.5 billion (as of December 31, 2017)

Return on investments 2008 - 2017

Year

Return on investments

2008

-  1,6%

2009

   5,8%

2010

 11,5%

2011

 16,1%

2012

 14,3%

2013

   1,4%

2014

 29,5%

2015

   0,7%

2016

 12,3%

2017   2,0%