Hydralis, Vivaqua’s pension fund, has not had a good year on the stock market. The pension fund’s investments lost more than 11 percent of their value in 2022, which corresponds to a net loss of 104.5 million euros.
This is evident from the recently published annual report of Hydralis, the pension fund of water company Vivaqua. The pension fund itself attributes this result to “the poor performance of the financial markets”.
2022 was indeed a bad stock market year. For example, the Brussels stock exchange lost no less than 14 percent. The pension funds declined by an average of 15 percent.
Hydralis therefore shares in the blows. “Although we lost less than the average,” says Hydralis director Jonathan Biermann (MR). The cost price for paying out the pensions has meanwhile risen: from 36.9 to 39.1 million euros.
78 percent coverage
The idea is that Hydralis should have enough money to pay 100 percent of all current and future pensions. To achieve that coverage percentage, Vivaqua must achieve an annual return of 4.5 percent. However, due to the negative return of 11.2 percent in 2022, that average over several years has dropped to 4.3 percent. Hydralis now has enough money to pay out 78 percent of the pensions. Last year it was still 98 percent. “However, in practice there are no problems because we never have to pay out all pensions in one fell swoop,” says Biermann.
A new recovery plan has meanwhile been approved by Hydralis, Vivaqua and the financial watchdog FMSA. In order to make up for this year’s loss, the annual addition that Hydralis receives from Vivaqua to augment the pension fund will not be adjusted downwards – even though fewer and fewer civil servants are retiring, for which the fund is intended.
It is not the first time that the pension fund has been hit. In 2018, the fund also went into the red for 83 million euros. In the intervening years, the pension fund did well. For example, the net result in 2019 was almost 75 million euros, in 2020 8.1 million euros and in 2021 no less than 88.8 million euros, thanks to the “excellent performance of the equity markets”.
This article is originally published on bruzz.be