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Inflation-linked bonds, with a return of 23.2%, was the best-performing investment category.Holdings in equity (36%), fixed income (43%) and property (8%) delivered 14.2%, 19.4% and 18.4%, while the scheme’s hedge funds portfolio (9%) returned 2.9%.SPMS added that it lost 3.5% on its currency hedge, with 70% of the exposure against the US dollar covered and a 100% hedge of the British pound and the Japanese yen.The pension fund ended 2014 with a funding ratio of 126%.SPW, meanwhile, reported a quarterly return of 5.9%, leading to an annual performance of 23%.It said developed-market equities, credit and government bonds returned 18.9%, 14.8% and 13.4% last year.Its investments in hedge funds, private equity and infrastructure delivered 16.5%, 24.4% and 22.4%, respectively, while real estate produced a 20.4% return.SPW incurred a 27.2% loss on its investments in commodities, mainly due to the sharp drop in oil prices.The pension fund said its interest hedge contributed 14.6 percentage points to its annual result, and that it lost 4.8% on its currency hedge.In other news, the €8bn pension fund of steelworks Hoogovens and the €2.2bn Dutch scheme of ExxonMobil (Protector) are to replace their final-salary pension plans with average-salary schemes to cut costs.However, the Hoogovens scheme pointed out that its final-salary arrangements had been conditional, and that the accrual had already fallen 10% short of the 100% target in recent years.Both pension funds confirmed they would grant their participants inflation compensation, with Hoogovens raising pension rights for pensioners by 0.33% and for active participants and deferred members by 0.94%.It said its decision was based on the indexation rules under the new financial assessment framework (FTK) and its funding ratio of 113.1% at October-end.Protector, whose funding was 129% at the end of December, granted its active participants a full and unconditional indexation of 0.88%, based on the consumer index. SPMS, the €9.3bn occupational pension fund for medical consultants in the Netherlands, and SPW, the €10.5bn scheme for housing corporations, have reported annual returns of 25.3% and 23%, respectively. Both schemes benefited from extensive hedges of the interest risk on their liabilities.SPMS said 13.1 percentage points of its annual return came as a result of its 70% interest hedge via interest swaps.It said all of its asset classes delivered positive results.