Finnish pensions body slams IORP demand for benefits statement

first_imgA Finnish pensions association has criticised the requirement in the European Commission’s new IORP Directive for pension providers to issue scheme members with a uniform pension benefit statement for being unfair competitively.The Association of Finnish Pension Funds (ESY) said the way the standardised communication to customers was formulated was wrong and having such a requirement meant pension funds had a bigger administrative burden than life insurance companies.Ismo Heinström, lawyer for the association, told IPE: “It is regrettable that the pension benefit statement is formulated as if an IORP were an investment fund with totally different principles and objectives.”The kind of information demanded in the statement was not provided by insurance companies which had similar conditions, he said. He asked whether an IORP should therefore have to provide this extra information, when the commission laid weight on creating a level playing field for pension providers.Heinström said members should always be provided meaningful and relevant information. “The suggested pension benefit statement would provide members and beneficiaries unnecessary and misleading information not provided in insurance schemes with conditions that are in principle similar,” he said.The requirement would result in an unnecessary increase in costs for both the IORPs and the employers behind the schemes, Heinström said.On the whole, Finnish occupational pensions funds were well run, he said, and the institutions had so far provided their members with sufficient information.The Dutch Pension Federation previously criticised the revised IORP Directive’s proposals for a uniform statement as “overkill”.last_img read more

PensionDanmark warns of waning returns after return drops to 5%

first_imgTorben Möger Pedersen, PensionDanmark’s chief executive, said: “2015 was a turbulent year, particularly on the listed markets.”In the light of this, the pension is satisfied with the year’s investment return, he said.In its annual report, PensionDanmark warned that, over the next few years, it expects a somewhat lower return than in 2015.“The time of very high returns is over,” Möger Pedersen said.He said this was partly because of the very low level of interest rates, and partly due to the fact equities went from being priced at low levels just after the financial crisis to current levels, where they are priced slightly on the expensive side.He said there were also a lot of factors indicating that there would be greater swings in returns in the future than had been the case in recent years.PensionDanmark’s quoted equities made a 7.7% return in 2015, outperforming the benchmark by 3.4 percentage points, according to the annual report.Corporate and emerging market bonds, however, finished the year with a 2.4% loss, falling short of the benchmark by 0.8 percentage points.Within unlisted assets, private equity generated 12.1% last year, while infrastructure returned 7.2% and property 8.7%.PensionDanmark said it expanded its investments in infrastructure and real estate over the course of last year, emphasising that these assets were less sensitive to the economic cycle.It had DKK18.8bn invested in infrastructure and DKK13.6bn in real estate at the end of 2015, amounting to 18% of its overall investment assets of DKK183bn.The pension fund said the growth in employment in Denmark had shown through in its annual figures, with regular contributions rising 6% to DKK10.8bn in 2015, and membership numbers climbing by 20,000 to 684,000. Danish labour-market pension fund PensionDanmark reported 2015 investment returns of less than half the prior year’s levels at just over 5%.It predicted the returns it would reap over the next few years would turn out to be still lower, partly because equity markets are now overpriced. In its annual report, the pension fund said pre-tax profit on investment assets dropped to DKK7.1bn (€952n) in 2015 from DKK16.1bn in 2014.The pre-tax return for scheme members aged 65 fell to 3% last year from 10.6% the year before, while that for 40-year-old members slid to 5.2% from 10.5%.last_img read more

PGGM calls for regulatory leeway to promote sustainable investment

first_imgHe argued that regulatory changes in support of sustainability stand to increase institutional investment in private equity, infrastructure and real estate.Other industry experts, however, questioned whether sustainable investments were inherently less risky.Corinne Wortmann-Kool, chair at the €381bn civil service scheme ABP, cited the pension fund’s recent investments in Spanish solar panels; the business case for the investments was lost, she said, after the local government reneged on promised subsidies for the project.She said she expected, however, that sustainable investments were generally capable of delivering better returns over the longer term.Karlijn van Lierop, head of sustainable investment at the €114bn asset manager MN, said: “Stating that sustainable investment or impact investing carries – per definition – lower risk is taking the corner too tightly.“We believe in the principles of both, but we assess each individual investment [on its constituent parts] for risk and return.”The Dutch regulator has said it is already addressing the issue with the sector in a working group exploring the barriers and incentives for sustainable investment, adding that the results of the discussion would be published later this year. PGGM has called for more regulatory leeway for pension funds and other institutional investors when it comes to sustainable investing.The €200bn Dutch asset manager said pension funds would increase their sustainable allocations if the investments were deemed by the regulator (DNB) to pose less risk.A spokesman for PGGM, asset manager for the €185bn healthcare pension fund PFZW, said: “At the moment, [as far as the regulator is concerned], a euro invested in a coal-fired power station counts the same as a euro invested in a wind farm, and we would like to discuss this.”Speaking in Amsterdam at the recent GIIN Congress on impact investing, Peter Borgdorff, PFZW’s director, reiterated the pension fund’s belief that sustainable investments pose less risk over the longer term, although he conceded that this had yet to be proven. last_img read more

Pension fund for SecurCash joins road transportion scheme Vervoer

first_imgThis co-incided with provider Centraal Beheer Achmea’s decision to terminate its services, as its contract for re-insured pension arrangements could not legally be renewed.The sponsors of PSS had carried out a significant reorganisation in 2015, resulting in the number of employees being nearly halved to just over 500.According to the annual report, the scheme’s accountability body (VO) cited growing compliance requirements as a major hurdle to continuing PSS as an independent pension fund.PSS reported administration costs of €443 per participant over 2015, spending 0.24% on asset management.Security had its pensions re-insured with Centraal Beheer, while its administration was carried out bij Centraal Beheer Achmea.In 2015, its asset management was carried out by BMO Global Asset Management, BlackRock and KAS Bank.As of the end of September, PSS’s funding stood at 101.7%, while Vervoer reported a coverage of 98.9% at the end of November.PSS has more than 2,000 participants in total, with deferred members and pensioners numbering about 1,245 and 280, respectively. Security, the €178m Dutch pension fund of SecurCash, has joined the €21.5bn sector-wide scheme for private road transportation Vervoer.Vervoer said Security – also known as PSS – transferred the pension rights of all its participants and pensioners as of 1 January, and that new pensions rights would be accrued under the pension plan for the sector for professional road haulage.PSS carried out the pension plan for SecurCash Netherlands and SecurCash Geldverwerking, which includes value transport firm Brinks.According to the scheme’s 2015 annual report, its sponsors have cancelled the contract for pensions provision with the scheme because of the low number of active participants and increasing costs.last_img read more

UK to accelerate state pension age rise

first_imgThe UK’s state pension age (SPA) will rise to 68 seven years earlier than currently planned, the government has announced.It also outlined plans for further increases, meaning the SPA would reach 70 by 2056.David Gauke, secretary of state for work and pensions, told parliament today that the increase would take place between 2037 and 2039, following a recommendation made by John Cridland’s review of the UK’s state pension system.In his foreword to the government’s report, published today, Gauke said the change would save £74bn (€83.6bn) by 2045-46. “Increased longevity is a triumph of improved health and better living standards,” Gauke said. “But an ageing population also presents us with some profound challenges.”He added that the only alternatives to bringing forward the SPA increase would be to lower payments to pensioners or increase the payments made by workers to fund the state pension.Currently, the SPA is due to rise to 66 by 2020 and to 67 by 2028.The government said it would conduct a further review before finalising the SPA increase “to enable consideration of the latest life expectancy projections and to allow us to evaluate the effects of current rises in state pension age”. Recent longevity data has suggested that improvements to UK life expectancy have plateaued.In addition, the report also outlined the government’s intention to cap the proportion of a person’s working life in which they can receive the state pension at 32%. The report said: “In order to keep the state pension sustainable and maintain fairness between generations in the future, the government will aim for ‘up to 32%’ in the long run as the right proportion of adult life to spend in receipt of state pension. A 32% timetable is consistent with the average proportion of adult life spent above state pension age experienced by people over the last 25 years.”According to calculations from the Government Actuary’s Department, capping this figure would mean further rises in the SPA, to 69 by 2042 and to 70 by 2056.John Cridland’s review also recommended that the UK’s triple lock be scrapped. This was introduced in 2010 as a guarantee that the state pension would be increased annually by the higher of wage inflation, price inflation, or 2.5%.However, the ruling Conservative Party’s plans to remove the triple lock were scuppered following last month’s election. Prime minister Theresa May was forced to drop the proposal as part of an agreement with Northern Ireland’s Democratic Unionist Party to support the Conservatives in parliament.last_img read more

Institutional investors driving sustainable fund growth in Austria

first_imgThe market for funds invested according to sustainability criteria continues to grow strongly in Austria with assets increasing by 12% in 2017.At the end of 2017 there were 82 funds offered to institutional and retail clients (2016: 66 funds) with a total volume of €7.5bn.Overall, 16 out of 19 investment companies offering funds in Austria now have one or more funds with a sustainability label.“Even three or four years ago it was only half of the providers, now almost everyone has it,” said Reinhard Friesenbichler, founder and managing director of RFU Consulting, which specialises in sustainability research. “It is not a niche anymore but a well established segment,” he told IPE.A similar growth in assets was reported in 2016 and 2015, indicating that the main source for demand for sustainability funds was Vorsorgekassen, which manage mandatory payments by employers for severance pay.At year-end 2017 these funds managed €10.4bn in total, an increase of 11% year-on-year – after an 8% growth in assets in 2016.All of the eight providers in this market have committed to a 100%-sustainable investment policy. Only the criteria differ in each Vorsorgekasse.Friesenbichler confirmed most of the demand for sustainable funds came from Vorsorgekassen and Pensionskassen, followed by churches.“But we see a lot of interest from insurers, which will definitely drive demand in the near future,” he added.More than half of the sustainability funds offered on the market have qualified for the Austrian “Umweltzeichen”. This national environmental label has been around for various products since 1990, and was adjusted for financial products in 2004.“The ‘Umweltzeichen’ has a high standard compared to other labels and has already become the minimum standard many Austrian investors are expecting,” said Friesenbichler.Even international investment companies offering sustainable funds on the Austrian markets have applied for the label.Friesenbichler highlighted the high level of standards in this fund segment, saying: “We do not see ‘green washing’ happening in the market on a larger scale.”Because of the high standards of the Umweltzeichen, the European label FNG, introduced in 2016, has not really gained much foothold in the Austrian market.last_img read more

​Per Frennberg moves up to chair AP7

first_imgSweden’s finance ministry has announced former Alecta chief investment officer Per Frennberg is now moving up to become the new chair of AP7’s supervisory board, after serving as deputy chair of the premium pension system’s SEK674bn (€64bn) default fund for the last 12 months.In its annual announcement on changes to the AP funds’ boards – which as usual follows the most recent annual report to parliament on the national pension funds – the government also named seven new members taking their place on the panels.At AP7, Frennberg – who left Sweden’s largest pension fund Alecta in 2017 after eight years as CIO – is replacing the fund’s outgoing chair Rose Marie Westman, who is leaving the fund’s board after serving the maximum allowable term of eight years, the finance ministry said.Finance Minister Per Bolund said: “I am happy to continue to strengthen the boards’ competence and I want to take the opportunity to express my appreciation for their and the funds’ work.” The funds – five of which are buffer funds backing the largely pay-as-you-go income pension component of the state or general pension – had an important mission in managing the pensions of the Swedish people, he said.Both AP7 and buffer fund AP1 are getting new deputy chairs, with Emma Ihre and Anna Hesselman, respectively, taking on the second-in-command roles at the two funds.Other new members to be appointed to the AP funds are Erik Sjöström to AP1’s board, Åsa Erba-Stenhammar to AP2 and Carina Wutzler to AP3.  Per FrennbergAP4 is seeing the arrival of three new board members – Monica Elling, Aleksandar Zuza and Helen Eliasson, while Magnus Vesterlund has been appointed to AP7’s board, according to today’s government announcement.Altogether the AP funds have 50 board members, all of whom are appointed for one year at a time.By law, four members of each of AP1, AP2, AP3 and AP4 – the biggest buffer funds – are appointed based on proposals from employee and employer organisations.Publishing the government’s 2019 report on the six AP funds, which released their annual results individually earlier this year, Bolund said last year Sweden had introduced the world’s most stringent legislation for sustainable management of pension capital.“The fact that last year’s carbon footprint fell by 9% indicates a break in the trend,” he said.“I am very pleased that the AP funds are now stepping up their sustainability work and we are already seeing how this will have an effect,” the minister said.To read the digital edition of IPE’s latest magazine click here.last_img read more

Dutch social partners call for ‘transition regime’ to new pensions contract

first_imgTrade unions and employer organisation have written a letter to the Dutch cabinet asking for a “transition regime” to the new pensions contract to prevent “unnecessary” pension cuts and contribution hikes.Many pension funds are responding to their rapidly worsening financial situation by hiking pension premiums or cutting pension rights, trade union FNV and employer organisations VNO-NCW and MKB Nederland stated in the letter which was published yesterday.Until they make the transition to the new defined contribution contract by 2026, Dutch pension funds will continue to be governed by the current, much stricter rules that dictate pension funds will have to be cut if funding ratios are below 100%.The gradual introduction of a new, lower ultimate forward rate (UFR) from next year will lead to further pressure on already low funding ratios.  The social partners said they fear “social unrest and negative macroeconomic consequences” if companies have to increase their contributions in the coming years to prop up pension funds’ funding ratios.In the private sector, higher pension premiums are detrimental to economic activity, investment and purchasing power, they warned.When the government and social partners concluded negotiations about the new pensions contract last summer, the government called on pension funds to keep premiums and pension rights stable.Social affairs minister Wouter Koolmees reduced the minimum required funding ratios pension funds need to have at the end of this year to prevent having to cut pensions from 100% to 90%.Without this temporary emergency measure, which was also in force in 2019, pension funds would have already had to apply drastic cuts as the funding ratios of most of the largest pension funds currently hover around this 90% level.“But it’s now also important to provide clarity for the years hereafter,” said newly appointed VNO-NCW president Ingrid Thijssen, implicitly calling for a continuation of the reprieve.The three organisations stopped short, however, from communicating any other specific demands to the government about what the “transition regime” should look like.To read the digital edition of IPE’s latest magazine click here.last_img read more

The multimillion-dollar sale of a Gold Coast trophy home has set a new street record

first_img252 Pacific Parade, Bilinga.“At that stage, it had an old beach shack on it that had been built in the 1940s and was in a fairly dilapidated state,” Dr Johnson told The Bulletin earlier this month.Renowned Coast architect Paul Uhlmann helped the couple design the five-­bedroom, three bathroom home that stands today, which was built in 2011.It has a seemingly endless list of luxury features and stunning views of the coastline.The sale comes after another beachfront home at Bilinga sold for $3.3 million under the hammer last weekend.Mr Dowker, who also marketed the Short St property, said following the auction beachfront properties between Palm Beach and Bilinga were in high demand lately.He reiterated the beachfront market’s strength last week, explaining many have sold within 30 days of being listed.“There’s been really good momentum in the beachfront market,” he said. 252 Pacific Parade, Bilinga.Like that property, the house at No. 252 attracted prospective buyers in droves before it sold late last week.Ray White Mermaid Beach agent Troy Dowker said more than 40 groups inspected the trophy home throughout the month it was on the market.“We had three offers running on it, two locals and one (from) interstate,” he said.More from news02:37International architect Desmond Brooks selling luxury beach villa15 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago“It sold a couple of days before auction.”A local buyer living on the southern Gold Coast was the successful bidder.Mr Dowker said the property’s 16m-wide ocean frontage was a major drawcard, as many beachfront properties were 10m wide.“It’s wider than your standard block, that gives you a really nice expansive footprint,” he said.A traditional beach house once stood on the 506sq m block but sellers Kay and Trevor Johnson bought it in 2007 with the intention of knocking it down and replacing it with their dream home. 252 Pacific Parade, Bilinga.A WAVE of house hunters on the market for beachfront homes continues to sweep across the Gold Coast with a Bilinga property fetching a record price last week.The towering seaside mansion on Pacific Pde sold for $4 million days before its scheduled auction on Saturday.It marks a record sale for the street, which was ­previously set by former Queensland Governor ­Leneen Forde’s property of 25 years.Member for Currumbin Jann Stuckey bought the property at No. 248 for $3.1 million at a packed on-site auction in February. 252 Pacific Parade, Bilinga.center_img 252 Pacific Parade, Bilinga. 252 Pacific Parade, Bilinga.last_img read more

Hot weather and holiday season provides perfect selling conditions on the Gold Coast

first_imgAndrew Bell at The Event earlier this year. Picture Mike Batterham“As always, sellers will still be taking advantage of the peak holiday season on the Gold Coast,” Ray White Surfers Paradise chief executive Andrew Bell said. “January remains our best month for tourism, and with more accommodation coming onto the market, we’re ­expecting record numbers again next year accompanied by another strong buying ­season. “Inquiries traditionally are up 60 per cent during January and we’re expecting next year to be no different.”Mr Bell said while the auction program was being finalised, he was confident of delivering an array of some of the best Gold Coast properties to buyers. “The Australia Day long weekend will be the prime time for buyers to stake their claim on their piece of Gold Coast real estate,” he said. Lucy Cole’s team is holding an auction event on January 25, 2019. Photo by Richard Gosling“They know a lot of people are here on holiday and there are a lot of events happening on the Coast,” Ms Cole said.“We are hosting our event the day before Australia Day as that weekend is extremely busy for the Gold Coast.“We’re the tourist capital — parents generally take time off to spend with their families and start doing their house-hunting research — they look at relocating, check out schools and universities.” Amir Mian Prestige Property Agents’ auction event earlier this year.He has a selection of luxury properties from Paradise Point, Runaway Bay, Surfers Paradise, Tallebudgera and Tamborine set to go under the hammer. “This will be one of the biggest auctions for high-end properties on Gold Coast,” Mr Mian said.The team at Lucy Cole Prestige Properties is hosting their Alfresco Auctions on January 25.Principal Lucy Cole said the holiday season was the perfect time for sellers to promote their properties. MORE NEWS: The tropical oasis that’s hidden in plain sightcenter_img More from news02:37International architect Desmond Brooks selling luxury beach villa13 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days agoLuke Henderson and Andrew Henderson of Professionals John Henderson Real Estate. Picture: Jerad WilliamsProfessionals John Henderson Real Estate are taking eight properties to auction on January 22.“On the Gold Coast, January is generally a pretty strong market,” principal Andrew Henderson said.“Other parts of the country take time off, but for us here on the Coast, January is pretty busy.“We will keep working and be open throughout the holidays — for Mermaid Beach, Miami and Broadbeach we find we get a lot of Brisbane and interstate buyers coming here on holidays.” Amir Mian, principal of Amir Mian Prestige Property Agents, is hosting his auction event on January 23. Bidding frenzy at Ray White Surfers Paradise Group’s The Event 2018, in January. Picture Mike BatterhamHOT summer weather and the holiday season provides an ideal backdrop for Gold Coast real estate agents who are gearing up for a bumper selling period. Several agencies host their summer auction events in January, using the Coast’s busy holiday period to target potential buyers.Ray White Surfers Paradise Group is gearing up for its biggest annual auction program, The Event 2019, to be held on January 28. MORE NEWS: Good news for Gold Coast property marketlast_img read more