Disappointing return on investments result in coverage ratio decline

APS 2018 Financial Statements

Disappointing return on investments result in coverage ratio decline

Philipsburg – December 17th, 2019. The General Audit Chamber submitted its report entitled Compliance audit: 2018 Financial Statements of the General Pension Fund Sint Maarten (Algemeen Pensioenfonds Sint Maarten – APS) to Parliament today. The report addresses findings and conclusions resulting from the review of the pension fund’s financial statement of 2018.

The Fund’s coverage ratio at the end of 2018 was 97.6% (2017: 103.1%). This means that in 2018, the Fund’s assets were insufficient to cover both general and investment risks.

Disappointing results in the international investment portfolio were the primary cause for the reduction of the coverage ratio in 2018. Where there was a positive result in 2017 of ANG 22.5 million, in fiscal year 2018 APS suffered a loss of ANG 36.9 million. As a result, the coverage ratio decreased by 5.5% as compared to 2017.

Taking measures can benefit the Fund’s performance in the opinion of the General Audit Chamber. They recommend that APS carries out a so-called ALM-study to determine the need for adjustments to the Fund’s strategic investment policy. In their response, APS states that a risk budgeting study is currently underway. The Audit Chamber believes that the execution of such a study is a positive development, however, they go on to point out that a risk budgeting study is not a part of the APS’ investment cycle, whereas the ALM-study is.

The report is published in both English and Dutch and is available on the website of the General Audit Chamber (www.arsxm.org).  Readers are invited to use the digital glossary that is included in this report. It provides a supplement to explain jargon and technical terminology. By clicking on words shown in blue, the reader is automatically redirected to the glossary site.


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