PFA blames drop in pension transfers on lack of market mobility

first_imgHowever, one-off payments and transfers dwindled to DKK5.6bn from DKK7.5bn.PFA blamed this drop on a lack of mobility in the Danish pensions market.This was because a number of pension providers were still failing to offer their customers the transfer allowance when they moved from a with-profits pension to a unit-link product, it said.By contrast, PFA has given this to its customers month by month since 2009, it said.Henrik Heideby, chief executive and head of the PFA group, said: “It is unfortunate the pensions market is stalling and competition is being threatened.”He added that it was very important to “re-create efficiency” in the market.“At the same time, the pensions sector must work constructively towards a solution because it has agreed with the government that pension companies should encourage more customers to move to a unit-link product,” Heideby said.Reporting interim figures, PFA said solvency coverage rose to 265% at the end of September from 227% a year before.Total assets increased to DKK420bn at the end of September from DKK417bn at the end of 2013.As a mutual company, PFA’s customers get a share of the profit in the form of KundeKapital (customer capital), in addition to investment returns on their pension products.The KundeKapital percentage increased to 13% in the first nine months of the year from 9.9% in the same period last year.After tax and minority interests, the PFA group posted a profit of DKK797m for the period, up from DKK76bn in the same period last year. Denmark’s largest commercial pensions provider PFA has reported a big swing back to investment profit but complained that other providers were stifling competition by denying customers their full allowances on transferring out of pension products.The return for with-profits pension products bounced back to 11.3% for the first nine months of the year, after a 2% loss in the same period a year earlier, while unit-link pensions returned 8.1%, up from 5.2%.In absolute terms, the PFA group made an investment return of DKK34.7bn (€4.7bn) between January and September, up from a loss of DKK3bn reported for the same period last year.Regular contributions climbed to DKK12.5bn between January and September, up from DKK11.9bn in the same period last year.last_img read more

Orsima pension fund opts for merger with transport scheme Vervoer

first_imgThe pension fund of industrial cleaning sector Orsima has ultimately opted for a merger with Vervoer, the €19.6bn pension fund for private road transport, rather than BPF Schoonmaak, the industry-wide scheme for the cleaning sector.The €70m scheme, said that it could not reach a final agreement with Schoonmaak, despite the advanced stage of the negotiations about a merger last October.According to the board of the Orsima scheme, it had subsequently decided to proceed with Vervoer, as the transport scheme had also been selected as a potential new provider.The other candidates were BpfBOUW, the industry-wide pension funds for the building industry, and the graphics industry fund PGB as well as insurer Aegon, the pension fund previously said. Meanwhile, supervisor De Nederlandsche Bank (DNB) has approved a collective value transfer of the assets of the Orsima scheme to Vervoer as of 1 January 2015, the scheme added. Under the new arrangement, the annual pensions accrual of the participants of the Orsima scheme would rise by 2 basis points to 1.77%, whereas the franchise – the part of the salary which is exempt from pensions accrual – would increase by €145 to €11,395.In addition, the pension paid to dependants would change from risk-based to accrual-based, and future inflation compensation would be guided by the salary index rather than the consumer index.The Orsima added that the pension contribution would remain unchanged, at a total of 23% of the pensionable salary, of which 10.85% to be paid by the workers.As of last November, Pensioenfonds Orsima had a funding ratio of 111.8%, while the coverage of Pensioenfonds Vervoer was 112.7%.The Orsima scheme has approximately 1,100 active participants, 1,400 deferred members and 350 pensioners, affiliated with 38 employers. Its board has said that it wanted to merge, as it deemed itself vulnerable because of its modest scale as well as its relatively high costs.It reported administration costs of €937 per participant over 2013, which is more than three times the average for Dutch pension funds.last_img read more

EIOPA promises ‘simplified’ stress tests for European pension funds

first_imgGabriel Bernardino, chairman at the European Insurance and Occupational Pensions Authority (EIOPA), has confirmed there will be “simplifications” to the stress tests for pension funds that last year included as many as 18 different scenarios.Speaking at the Handelsblatt occupational pension conference in Berlin, Bernardino said there would only be two “baseline scenarios”.He also said EIOPA wanted to ensure more small and medium-sized enterprises took part in the stress tests and specifically called on German stakeholders to participate, as this was “the only way” for the European supervisor “to understand the specifics of German pensions and to get an idea of the system”.EIOPA’s chairman confirmed that the tests would be held between May and July and be followed by an assessment of the responses. He said he expected a final report to be published by year-end so that EIOPA could then advise the European Commission on any further steps in Q1 2016.Bernardino said the stress tests would cover both defined contribution and defined benefit plans, “looking at the effects on different age groups within a pension plan” and testing the resilience of pension systems to “a number of shocks”, including the low-interest-rate environment and longevity.He promised that any concept to assess sustainability in the pensions system, such as some form of the holistic balance sheet (HBS) approach, would be implemented in a “proportionate way” and take “specifics of individual pensions systems” into account.For Germany, he highlighted the issues of pension sponsor support and the role of the pension protection fund.He reiterated he “never said Solvency II should be applied to pensions” but stressed that “we want to provide the supervisory community with a framework to analyse the sustainability of the system”.Bernardino pointed out that, “if pension promises are assessed to be unsustainable, then local supervisors should get the power to interfere”.But he added that “this will never be a one-size-fits all approach”.However, he said he was convinced there would be “no cross-border pension arrangement without a more standardised approach to supervision on a European level”.And while it should “not be harmonised on all levels”, there should be a more standardised approach to assessing sustainability and funding.He also pointed to two areas where pension systems across Europe could do with improvement, namely transparency on costs and the particulars of risk-sharing.“Increasing transparency on risk bearing would create more realistic expectations and help members better calculate for their future,” he said.With respect to costs, Bernardino said the level of knowledge in the pensions sector was “rather diminished”.“In many cases,” he added, “not even trustees or the management of pension funds know about all the charges and costs in the plans.”last_img read more

​Unipension CEO quits after pension funds jump to Sampension [updated]

first_imgThe Architects’ Pension Fund (AP) and the Pension Fund for Agricultural Academics and Veterinary Surgeons (PJD) have decided to move their administration and asset management to Sampension – Denmark’s third-largest non-statutory pensions provider – while MP Pension (MP) for Danish M.A.s, M.Sc.s and PhDs is staying put.The chairmen of the three pension funds said in a joint statement: “We could not find a common way forward.”Erik Bisgaard Madsen and Mette Carstad, chairmen of PJD and the Architects’ Pension Fund, respectively, said: “We didn’t feel we could make a cooperation go quickly enough in the direction we wanted.”The funds, for example, had been unable to agree on the conditions and principles for a joint investment advice arm, which would have been able to generate revenue and reduce Unipension’s costs – and costs were a key issue for the two pension funds, the chairmen said.The three funds established Unipension in 2008.For its part, Sampension said the new cooperation with the two pension funds would mean lower overall costs.Hasse Jørgensen, chief executive of Sampension, said: “We only have one goal, and that is to create the most value possible for members.”He said the organisation did not have owners that drew a lot of money out of the business.Sampension said the addition of the two pension funds would increase its total assets under management by just under DKK25bn to DKK280bn, and add 18,000 members.Jørgensen told IPE his company was very pleased with the double deal.“It is a business win and within a very important part of our strategy, which is to grow our volume further and make the costs as low as possible for current Sampension members, as well as for pension plans moving to us,” he said.Sampension said the two pension funds would retain much independence under the new cooperation.This is a total outsourcing, said Jørgensen, under which the two pension funds will be separate legal entities with their own boards.They will be able to decide on their own investment strategies and their own stance on corporate social responsibility (CSR), among other things.Sampension said the pension funds would retain their own brand identities.Jørgensen said this was the first time pension funds had moved their assets to Sampension under these particular terms, and that this had been the starting point for discussions between the parties.Meanwhile, the chairman of MP Pension Tina Mose said the other two pension funds in Unipension had pressed to reduce the proportion of costs in the cooperation.She said Jens Munch Holst would take the helm at Unipension until 31 December 2016, which has been set as the last day of the three-pension-fund cooperation, according to the termination agreement.However, this date could be brought forward if the parties agree, Unipension said.The parties have elected a steering committee to implement the split step-by-step, it said.MP Pension is to continue pensions administration for its almost 109,000 membership, carrying this out from the premises in the town of Gentofte that is currently home to Unipension.At the end of 2016, the name Unipension will then disappear, the parties said.Mose said MP Pension was large enough to run itself.“In the short term, it will be a little expensive for our members,” she said.However, the other two pension funds are sharing the costs of the split, she said. Denmark’s Unipension, set up by three professional pension funds to manage their assets and administration collectively, has lost two of the funds to rival Sampension.Further, its chief executive has quit over the crisis.Cristina Lage, chief executive at Unipension, which currently manages DKK119bn (€16bn) on behalf of the three pension funds, decided to resign from the role in connection with “the divorce”, the pensions administrator said.She will be replaced by Jens Munch Holst, Unipension’s CFO and CDO.last_img read more

New Irish government pledges action on pension reform

first_imgThe draft programme, leaked to national media outlets last week, categorised pensions as one of several “long-term challenges” facing the country the administration should seek to address.The programme said the Irish political system remained “too focused on the short term” and failed to accommodate long-term thinking on policy areas including housing, long-term funding of health and education, and pension policy.It is possible further detail of any pension reform could be contained in ministerial strategy statements, which the programme pledges each department will draft, consulting on its contents with stakeholders and fellow lawmakers.Despite Fine Gael’s reliance on a grouping of independent parliamentarians to form a minority government, discussions on the rollout of a universal second-pillar pension system may still succeed.The main opposition party, Fianna Fáil, has agreed to support Kenny’s administration on budget matters, and both Fianna Fáil and Fine Gael pledged to introduce an auto-enrolment-based supplementary pension system in their manifestos ahead of February’s inconclusive election.Preliminary work on the reform began more than a year ago, when the previous government launched the Universal Retirement Savings Group (URSG) to advise on the design of a new occupational pension system.The Irish Pensions Authority has separately pledged to publish a document on pension reform by the summer, outlining how the sector could be regulated in future. Housing and sovereign wealthThe draft programme for government also said the country’s sovereign development fund, the Ireland Strategic Investment Fund (ISIF), would be one of the partners in a new scheme to boost private sector housing construction, working alongside the European Investment Bank and the Central Bank of Ireland to draft the new ‘Help to Build’ programme within the government’s first year.It added: “We will support the Irish Strategic Investment Fund [sic] to encourage the delivery of housing-related enabling infrastructure in large-scale priority development areas.”The ISIF has already backed a €500m residential housing venture with KKR, which it hopes will see the development of more than 11,000 new homes. Ireland’s new government has pledged to continue work on a universal second-pillar pension system despite the Fine Gael-led administration’s lack of a majority in Parliament.Enda Kenny, who won support last week for a second term as Taoiseach, or prime minister, following an inconclusive general election in February, has named Leo Varadkar minister for social protection, succeeding Joan Burton after five years in the role.Varadkar, a former transport and health minister, told public broadcaster RTÉ on 7 May the introduction of a universal pension system would be one of his priorities while at the Department of Social Protection.The pledge comes despite the briefest of mentions of pension reform in a draft government programme, outlining the legislative programme of the Fine Gael-led minority government.last_img read more

European institutions to ramp up domestic fixed income, survey shows

first_imgFidelity – when asked about the high preference for domestic fixed income*, particularly in the UK and the rest of Europe – said these investors were focusing more on portfolio preservation than growth. “Both of those regions cited volatility as their top concern, likely driving interest toward fixed income,” it said. The asset manager also cited European institutions’ return expectations.“Surprisingly, both Europe and the UK expect domestic fixed income to outperform domestic equity – by around 75 basis points and 100bps, respectively,” it said. In the previous survey four years ago, only 14% of European institutions wanted to increase their exposure to domestic equities, while in the UK the figure came to 38%.Illiquid alternatives were also less popular, with only around 45% of respondents showing increased interest in the asset class.This year, none of the surveyed UK and other European institutions wants to reduce exposure to illiquid alternatives.The only other asset class none of the investors in the two regions wants to reduce is cash, which is expected to be increased in around 70% of portfolios in UK and the rest of Europe, Fidelity said. *The original version of the article referred to a preference for domestic equities. Eighty percent of European institutions (excluding the UK) are planning to increase their exposure to domestic fixed income over the next 12-24 months, according to a survey by Fidelity.Among UK investors, this figure was even higher, at 87%, while globally, just 64% of respondents said they would be increasing exposure to their country’s bonds.According to Fidelity’s Global Institutional Investor Survey, illiquid alternatives are also set to increase in more portfolios, with 93% of European institutions and 92% of UK investors planning to invest more in the asset class.Globally, 72% of respondents said they were keen on illiquids. last_img read more

EU finance ministers consider FTT exemption for pension funds

first_imgAccording to minister’s statement, there was a discussion at the meeting about whether a pension fund exemption should apply in general or if member states should be able to work with an individual “opt-out clause”.The statement also noted that a “number of member states also pointed out the international economic context which is very volatile at this point, due to Brexit and possible new financial regulations in the US for example”.The statement said that further technical analysis of the effects of a FTT on the real economy and the pension funds will be carried out by the next meeting, which will take place at the end of March. The 10 EU member states negotiating the possible introduction of a financial transactions tax (FTT) are to carry out further technical analysis of its effects on pension funds and the real economy.The decision to take this step comes after a possible exemption for pension funds was discussed during a meeting of the finance ministers of the member states earlier this week. Belgium is one of the member states involved in the negotiations and is concerned about the effect of a FTT on pension funds. The Belgian occupational pensions association has been very vocal about the damaging effect it believes the FTT would have on pension funds in the country.In a statement, the Belgian finance minister, Johan Van Overtfeldt, said that the “safeguarding of pension funds” is one of the provisions of the federal government’s coalition agreement.last_img read more

UK roundup: Pearson insures £1.2bn of liabilities in ‘umbrella’ deal

first_imgThe pension fund of FTSE 100 publishing group Pearson has agreed two buy-ins worth £600m (€676m) each with insurers Aviva and Legal & General (L&G).The deals were agreed under an “umbrella” derisking structure, which will streamline the process for any further transactions.Clive Wellsteed, partner at consultants LCP and lead adviser to the trustees of the £3.3bn scheme, said: “The key advantage of an umbrella contract, as used by the Pearson Pension Plan, is the ability to complete future buy-ins quickly if pricing is competitive, building on the strong relationships and contract terms already in place with the insurers.”The deal secures pension payments for roughly 4,800 members. The umbrella structure is understood to be similar to that employed by the ICI Pension Fund, which has completed 11 separate buy-ins since 2013 – including five in the space of six months last year.Aviva’s tranche marked the insurer’s biggest single derisking transaction in the UK since it began expanding its capacity in 2014. This year alone the company has hired more than 30 people to its bulk annuity team.L&G, meanwhile, completed £2.4bn worth of UK pension risk transfer deals in the first half of 2017, and since June has been active in the US market, writing $120m (€102m) of business.Kerrigan Procter, CEO of L&G Retirement, said the firm was currently quoting on transactions worth a combined £15bn as demand for derisking grows.‘20% of FTSE 100 schemes would struggle in a recession’One in five defined benefit (DB) schemes attached to FTSE 100 companies would struggle to meet their benefit obligations during an economic downturn, according to research by consultancy firm Cardano and its covenant advice subsidiary Lincoln Pensions.The firms analysed funding, covenant and investment risks for FTSE 100 DB schemes – as well as using a stress-testing method employed by the Pension Protection Fund – to construct “The Worry Index”. The 20% of schemes identified as in the “worry zone” had pension risks representing 30% or more of the market value of the sponsoring company.“In such a stress scenario, the pension deficit of the FTSE 100 would increase by £100bn,” the firms claimed – equal to roughly four years’ worth of pre-tax profits.Darren Redmayne, chief executive of Lincoln Pensions, said the data was a “wake-up call” for pension schemes to fully adopt integrated risk management methods, as required by the UK’s Pensions Regulator.“A pension is only as good as the covenant standing behind it,” he said. “This has been sadly demonstrated by cases like BHS and Tata – both were members of the FTSE 100 index in the 1980s.“Companies need to be around for decades to stand behind defined benefit pension promises. Over such timeframes, markets change and economic events – such as experienced in 2008 – can be expected to occur from time to time.”Albourne Partners appointed ‘devil’s advocate’ for LGPS poolThe UK’s £12.5bn (€14bn) Local Pensions Partnership (LPP) has appointed Albourne Partners to provide independent third-party research as a check on its internal recommendations for alternative investments.The original procurement notice referred to access to external research providing a “devil’s advocate to internal investment recommendations”.Only two firms tendered for the mandate, according to a procurement result notice published earlier today.last_img read more

Greater Manchester Pension Fund names first female chair

first_img“Kieran was an absolutely superb leader and chair,” Warrington said. “He had lots of energy and good ideas, was innovative, passionate and a hard worker. He didn’t expect anyone to do something he wasn’t prepared to do himself and I admired that in him.“Under his leadership the Greater Manchester Pension Fund experienced record growth and is now the biggest LGPS in the UK. He led the way on the national debate about pension fund pooling and using investment to drive growth. The UK’s largest public pension fund has named its first female chair, following the death of Kieran Quinn late last year.Councillor Brenda Warrington was appointed to lead the board of the £23bn (€26bn) Greater Manchester Pension Fund, part of the Local Government Pension Scheme (LGPS).In an announcement on the fund’s website, Warrington said: “I’m quite excited about the prospect though I’m not here because I’m a woman – I’m a person who was elected to do the job and I happen to be a woman. I hope that more and more women are able to achieve senior positions and top jobs.”She added that her appointment was “tinged with sadness” following Quinn’s death.  Source: Tameside CouncilCllr Brenda Warrington, GMPF“I believe he would expect us to follow his example and continue his good work and do the very best for the people of Tameside and the members of the Greater Manchester Pension Fund.”In addition to Warrington’s appointment, councillor Gerald Cooney was appointed vice-deputy of the committee, to assist deputy chair Mike Smith.Quinn was also chair of the Local Authority Pension Fund Forum. The forum has yet to name his successor.Greater Manchester is working with the West Yorkshire and Merseyside pension funds to create the Northern Pool, which is expected to cater for more than £42bn of assets between the three schemes.last_img read more

The chance to gain heaven by the sea

first_img115 Cay St, Saunders BeachSITTING in the pool with a glass of champagne in hand while watching the tide come in is what living at 115 Cay St is all about.The four-bedroom, three -bathroom, three-car home in Saunders Beach is on the market for $780,000 and offers buyers a rare opportunity to secure a high-end home that backs directly on to the beach. 115 Cay St, Saunders Beach“There is now a bistro there and it’s actually only 20 minutes to Townsville Hospital,” she said.“This is really a multi-million-dollar property and it is right on the beachfront.” 115 Cay St, Saunders Beach“The house has been built so that all your entertaining areas are on that beach side.”The home was built by Lifestyle Construction and has won both Master Builders and Housing Industry Association awards.The house has generous proportions with open-plan kitchen, dining and living areas.There is also a separate guest wing while the master bedroom has an ensuite, wardrobe and balcony.The garage is airconditioned and could double as another living area while the property is fully fenced with an electric gate, irrigation and is on 546sq m of land.Karyn Voevodin from McGrath Estate Agents Townsville is marketing the property and said Saunders Beach was on the way up with properties starting to move. 115 Cay St, Saunders BeachOwner John Bramich bought the home in 1988 before it was destroyed by Cyclone Yasi in 2011.He then had the home completely rebuilt, turning it into a dream beachside oasis that capitalised on it’s beachfront location.Two storeys of decks plus the swimming pool, complete with underwater bar stools, provide plenty of outdoor space to enjoy the ocean views from.Inside, no expense has been spared to deliver an exceptionally appointed home. Having been mainly used as a holiday home, it’s barely been lived in while also being kept immaculately maintained. More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020115 Cay St, Saunders BeachMr Bramich said he had planned to retire in the home but a change in circumstance had meant it was now on the market.“After Cyclone Yasi we had it redesigned and made into the absolutely beautiful home that it is today,” he said.“It’s absolute paradise there and the beach itself is so serene and peaceful. To me it’s Townsville’s best kept secret.“We used to love sitting on the bar stools while overlooking the beach and the upper deck overlooking the ocean is a beautiful spot for an afternoon happy hour.last_img read more