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“When I think about the past year, one of the main developments is the downturn on the international financial markets, especially in the fourth quarter. The year 2017 was a favorable investment year with a high return of 10%. We concluded 2018 with a negative return of -6.3%.”

The annual report of the DEPF for 2018 is available and we talk to DEPF chairman Erik van Diepen to go through the main points. “Of course, we are long-term investors, which means that favorable and less favorable investment years alternate”, he says. “But the investment performance for 2017 and 2018 shows that our investment policy is rather sensitive to external influences. One of the attention points for the board in 2019 is to investigate how we can make our investment policy more resilient to these influences. In doing so, we will enlist external expertise to take our asset management to an even higher professional level.”

The total available capital of the DEPF decreased from € 297.4 million at the end of 2017 to € 288.4 million at the end of 2018. The division of the capital per section is given in the above graph.

Employer makes additional contribution for Belgian participants
The negative developments in the international financial markets affected the financial position of the three sections within the DEPF. While they closed 2017 with funding ratios of 143% (DuPont Nederland), 128% (Genencor Netherlands) en 103% (DuPont Belgium), they ended 2018 with levels of, respectively, 115%, 114% and 100%. The employer even had to make an additional contribution of € 3 million for the Belgian section to raise the funding ratio to the minimally required level of 100%. “This is now the third time that the employer has to make an additional contribution. This entails an extra burden for the employer, but it also sends a positive message to our Belgian participants. It proves that the employer stands firm behind his employees and comes to the rescue when necessary. In my opinion, this is a reassurance for the participants. It also underlines the value that the employer attaches to pension as an employee benefit.”

The total number of participants of the DEPF declined slightly from 779 at the end of 2017 to 770 at the end of 2018. The composition of the number of participants across the three sections was as follows:

Number of participants DuPont Belgium DuPont Netherlands Genencor Netherlands Total
Active 286 255 70 611
Deferred rights 45 50 37 132
Pensioners 0 24 3 27
Total 331 329 140 770

 

Busy with European legislation

Erik van Diepen: “IORP II brings more focus on risk management, with more detailed reporting obligations.”

The implementation of new European legislation was an important theme in 2018. Erik tells that that board and the administrators spent much time on implementing the General Data Protection Regulation (GDPR, or AVG in the Netherlands). This new law arranges the protection of the rights of persons in processing personal data. “We now, for instance, have internal registers for the processing of personal data.”
The fund will also be confronted with new European legislation in 2019. Meanwhile, IORP II, the second European directive for supplementary collective pensions, has been published. This means that the Belgian supervisor will issue new guidelines. “IORP II brings more focus on risk management, with more detailed reporting obligations. The DEPF will have to appoint a risk manager who will co-operate with the existing audit functions. Of course, we must take care not to duplicate work because of the new rules. IORP II also makes supplementary demands on the communication to the participants, but the DEPF has already made steps into the right direction in that field.”

Adjustment Dutch pension schemes
The adjustment of the pension schemes within the Dutch sections of the DEPF was another important topic in 2018. “It is a good development that we moved from a final pay scheme to an average pay scheme with unconditional indexation for the active participants of DuPont Netherlands. The administrative implementation of the changes is now in the final phase.”
As a result of the merger between Dow and DuPont five companies temporarily joined the DEPF in 2018. Meanwhile, they have left again. After the split, the companies are part of Dow or Corteva and the employees of these enterprises take part in other pension schemes.

Click here to download the full annual report for 2018.