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UK government publishes DC charge-cap guidelines, transparency rules

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first_imgIn line with this, insurance providers are to be forced to ensure their schemes are independently scrutinised, also by April 2015.Webb said the requirement for governance committees in non-trust schemes means there would be, for the first time, a body acting on behalf of members in every pension scheme.The 75bps charge cap move by the government represents a much harder line than three previous options put out to consultation.In October 2013, the Department for Work & Pensions (DWP) suggested imposing either an absolute 75bps or 100bps cap, or allowing a comply and explain mechanism between the two.The consultation, however, led to further complications for the government, as it was forced to delay its response and suggested measures, with a cap initially expected to be in place by next week, and not 2015.However, after eventually forging a response, the 75bps will also be joined by increased transparency requirements for pension schemes.Under a new legal duty, trustees and independent governance committees will be forced to demand all charge data from providers, in order to scrutinise value for money.The government is also to consult with the Financial Conduct Authority on how to define additional member transaction costs for disclosure, and how to include this in the cap.“Over the next 10 years, the new charge cap will transfer £200m from the profits of the pensions industry to the pockets of savers,” Webb said.“To shine some light into the dark corners of the pensions industry, we will enforce full transparency on all charges faced by pension members. People need to have confidence [they’re] putting money into good pension schemes where their money will be looked after.”In additional moves, the government will also outlaw active member discounts, where charges are added when a member moves employers and ceases contributions.It will also outlaw consultancy charging and commission, where members are charged, via the scheme, for services received by their employer or sales commission. The UK government has moved to cap the charges borne by members saving into auto-enrolment defined contribution (DC) schemes, as its overhaul of the market continues.Announcing the reforms in Parliament, pensions minister Steve Webb said the proposed 75 basis point cap on DC default fund charges would be in place by April 2015.Schemes with all-inclusive annual and default fund charges will also see equivalent caps put into place.The government will also compel DC pension providers to reveal fully all member-borne charges to either trustees or independent governance committees in the case of non-trust DC schemes.last_img read more

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Tax autonomy for Scotland to lead to ‘greater divergence’ in UK pensions

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first_imgDominic Harris, pensions partner at CMS Cameron McKenna, said he did not expect any “significant” changes to either private pensions or the state pension.Mike Kennedy, partner at Barnett Waddingham, nevertheless warned that pension funds should not “rest easy”.However, Harris added that it was inevitable there would be an impact on pensions taxation.“If Scotland sets its own rates of income tax, they are unlikely to be identical to those in the rest of the UK,” he said.Kevin Legrand, head of pensions policy at Buck Consultants, noted that occupational pensions were “closely tied” to the tax system, and said any changes would lead to a “growing divergence between the regimes on each side of the border”.Harris agreed, arguing that the differing income tax rates would cause “administrative issues”, while Kennedy predicted increasing costs as a result.Arthur Zegleman, senior consultant at Towers Watson, noted that the Holyrood parliament had yet to avail itself of more limited tax-setting powers it has possessed since it was established in 1999, but warned that pension funds would need to be ready regardless.He pointed out that the post-tax income paid by occupational schemes, and the pensions tax relief paid by the UK’s tax authorities (HMRC), could vary depending on whether the member’s main residence were in Scotland or elsewhere.“Until 2018, HMRC plans to make uniform payments regardless of where the individual lives and balance things out by adjusting how much tax it takes out of their pay, but that is only a temporary sticking plaster,” he said.Zegelman stressed that there had so far been no suggestion Holyrood would be granted any powers over pensions tax relief, with the UK government so far having only committed to income tax.LCP partner Bob Scott added that, with the referendum concluded, pension trustees could now turn their attention to the changes announced by UK chancellor George Osborne in his Budget. Granting the Scottish Parliament greater autonomy could lead to problems in the area of pension taxation, experts have warned after the country rejected independence.Yesterday’s referendum – which saw 55% of the electorate vote in favour of Scotland remaining part of the UK – was preceded by pledges from the UK’s three main political parties that further powers would be bestowed on the devolved administration in Edinburgh.A commission, to be headed by Green Investment Bank chairman Lord Smith, will now negotiate the extent of new powers, which are expected to include greater autonomy on tax matters.National Association of Pension Funds chief executive Joanne Segars noted Smith’s appointment, which will see his commission also examine greater autonomy on welfare spending, and said the organisation would be staying alert of any proposals that would have a “material” impact on pensions.last_img read more

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Wednesday people roundup

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first_imgDanske Bank/Danica Pension, The Investment Association, RPMI Railpen Investments, Mercer, Buck Consultants, New City Initiative, Candriam Investors Group, Itaú UK Asset Management, Legal & General Pension Risk Transfer, Aon Hewitt, Macquarie Investment Management, HSBC Global Asset Management, Schroders, Rogge Global PartnersDanske Bank/Danica Pension – Tonny Thierry Andersen has been named director in charge of the newly formed Wealth Management division at Danske Bank. The bank decided in November to group its pension savings business and asset management operations into the single business unit, which officially began to exist at the beginning of this month. Danica Pension, Danske Capital and part of Danske Bank’s private banking activities are being included within Wealth Management, which will have more than DKK900bn (€121bn) in assets under management. Andersen took temporary charge of the new unit from November in addition to his responsibilities as head of the private banking division. He was head of personal banking since 2012 and will continue in this role alongside his new permanent job until a replacement has been found. Andersen has worked at Danske Bank since 1999 in different leadership roles, including CFO, and will remain as a member of the group board of directors, which he has been since 2006.The Investment Association (IA) – Chris Cummings has been appointed chief executive. He succeeds Daniel Godfrey, who left the IA in October 2015. Guy Sears has served for the past five months as interim chief executive during the search process. After spending seven years as director general at the AIFA, the trade body for financial advisers, Cummings launched TheCityUK in June 2010. He is expected to join by the end of the third quarter of 2016.RPMI Railpen Investments – Frank Curtiss, head of corporate governance, is to retire. He has had a number of roles over the years at Railpen, including working on private equity and later taking on responsibility for custody of assets, risk management and internal audit. His activities will be taken over by Deborah Gilshan, head of sustainable ownership, and her team. Mercer – Robert Evans has been appointed as a principal on the Innovation, Policy and Research team in Mercer’s Retirement business. He joins from Buck Consultants, where he was part of the senior team. Before then, he worked at Towers Perrin in the UK.New City Initiative – The association of 50 independent asset management companies from the UK and the Continent has appointed Jamie Carter as deputy chairman. Carter is also chief executive and one of the founding partners of boutique Oldfield Partners.Candriam Investors Group – Andreas Wenk has been appointed head of global financial institutions. He joins from Itaú UK Asset Management, where he was head of wholesale and institutional for Europe. He will be based in Candriam’s subsidiary in Germany.Legal & General – L&G’s Pension Risk Transfer business has appointed Matt Wilmington has director of strategic transactions. He joins from Aon Hewitt, where he was responsible for pension risk-management work across markets outside the UK, among other things.Macquarie Investment Management – David Derger has been appointed head of Nordic sales. He joins from HSBC Global Asset Management, where he spent five years as a sales manager for the Nordic region. He has also worked as an investment consultant at Wassum.Schroders – James Lindsay-Fynn has been appointed as a portfolio manager, focusing on rates and currencies, with the Fixed Income Global Multi-Sector team. He joins from Rogge Global Partners, where he was a partner and a global macro portfolio manager specialising in interest rates and currencies for global portfolios.last_img read more

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Wednesday people roundup [updated]

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first_imgAberdeen AM – Aberdeen Asset Management has named Hennie Houtveen as its head of asset management and transactions in the Netherlands. He will be tasked with optimising the Dutch property portfolio and in particular acquiring logistic real estate and shopping centres for Aberdeen’s investment funds. Previously, Houtveen worked at engineering firm Royal Haskoning DHV, the €15bn railways pension fund SPF, Meeùs Group and NS Stations, where he was responsible for commercial property of the Dutch Railways. Houtveen succeeds Mark Tordoir, who left for Heeneman & Partners, a firm focusing on structuring property investment funds.M&G Investments – Grant Hadland has joined the asset management arm of UK insurer Prudential as institutional equity multi-asset business development director. He was previously at Standard Life Investments, responsible for consultant relations, and held a similar role at Royal London Asset Management before that. M&G said Hadland would be responsible for developing its equity and multi-asset businesses, which manage £58bn (€67.6bn).Legal & General Investment Management – LGIM has hired Helena Morrissey as head of personal investing, a new role, for its UK retail investment business. Morrissey was previously chief executive of Newton Investment Management for 15 years. She is chair of UK asset management trade body the Investment Association, founded the 30% Club, which aims to get more women on company boards, and chairs the Diversity Project.Achmea IM – The €100bn asset manager Achmea Investment Management has appointed George Coppens as commercial director, succeeding Johan van Egmond, who has left Achmea. Coppens will be responsible for all client relations and meeting clients’ growth targets. He joins from Actiam – the €56bn asset manager of insurer Vivat – where he has been chief commercial officer and temporary chief executive since 2012. Prior to this, he worked at AXA, Credit Suisse and ABN Amro.SEI – The fiduciary manager has hired Simon Betteley from BlackRock. He joins as a sales director for the firm’s UK institutional sales team, and will focus on growing SEI’s business with larger UK pension funds. Betteley has also held investment and consulting roles at Aon Hewitt and Mercer.BMO GAM – BMO Global Asset Management has appointed Marga Hoek as a member of its responsible investment advisory council, which oversees BMO’s environmental, social, and governance-related investments. Hoek is chief executive and initiator of Groene Zaak, a network for sustainable entrepreneurs. She succeeds sustainability expert Annemieke Wijn of Anchor Consult, who leaves after completing her two-year term.Feri Trust – Marc Lennetz has joined the German investment manager from Frankfurter Volksbank. He has responsibility for strengthening Feri’s relations with private banks, savings banks and co-operative banks in Germany. Aon – Mark Duncan and Louise Wheeler have joined Aon’s DC business to cater for clients of the consultant’s master trust and other bundled trust-based schemes. Duncan joins from Scottish Widows where he managed some of the company’s largest corporate pensions arrangements. Wheeler transfers from Aon’s flexible benefits business.Brabners – The UK commercial law firm has appointed Ian Mylrea to lead the firm’s national pensions practice. He joined the company in December from DLA Piper and has worked for KPMG and Merrill Lynch. ING/NNIP – The new collective defined contribution (CDC) pension funds of ING and NNIP have each appointed a three-strong supervisory board (RvT), comprising Irene Vermeeren as chair and Erwin Capitain and Pim Baljet as members.Vermeeren is a pensions lawyer at JonesDay, whereas Capitain is a lecturer in accountancy at the Vrije Universiteit Amsterdam as well as supervisor at several pension funds. Baljet is executive chairman of private asset manager Oyens & Van Eeghen. Both pension funds have largely the same members on their board. The schemes ING CDC and NN CDC were established when the €30bn ING Pensioenfonds closed, following the division of ING into a banking arm and an asset management and insurance business.Standard Chartered – Tracey McDermott, former acting chief executive of the UK’s financial regulator, is to join the investment bank as group head of corporate, public, and regulatory affairs on 20 March. McDermott led the Financial Conduct Authority (FCA) from September 2015 until June 2016, bridging the gap between Martin Wheatley and current CEO Andrew Bailey. Prior to taking the CEO role, McDermott held a number of senior roles at the FCA overseeing financial services conduct regulation. At Standard Chartered, she will be responsible for public affairs, sustainability, and communications, and will join the company’s management team.Universal-Investment – Former State Street chief financial officer Frank Eggloff has joined the management board of the German asset manager as managing director. He was previously CFO at State Street in Munich, and spent 15 years with the company in various roles. At Universal he will be in charge of finance and controlling, the company said.last_img read more

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Swedbank exits from Lithuanian third-pillar provision

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first_imgINVL Asset Management is taking over the management of Swedbank Investicijų Valdymas’s only Lithuanian third-pillar pension fund.According to INVL Asset Management’s website, the transaction has been cleared by the Bank of Lithuania, the pension sector’s regulator, and is expected to be completed in three months’ time.Swedbank acquired the since-renamed Swedbank Supplementary Pension Fund from Danske Bank last year, along with the Danish bank’s three second-pillar funds.It sold the supplementary fund business to concentrate on the second pillar, where it is currently the market leader. Swedbank accounts for more than 40% of the system’s 1.27m members and 37% of the total net assets of €2.7bn as of end-June. INVL provides asset management and pension services to Lithuanian and Latvian clients. It entered the Lithuanian pension fund management market in 2014 when it acquired the funds previously run by MP Pension Funds Baltic. It also bought funds run by Finasta, which have since been merged and rebranded.It currently manages four second-pillar funds with €278.8m of assets and four third-pillar funds with €18.4m assets at the end of June.Earlier this month two of its second-pillar funds, the high-equity INVL Extremo II 16+ and the medium-equity INVL Medio II 47+, acquired 10% of the Lithuanian SME Fund, making INVL Asset Management its second biggest investor after the European Investment Fund (EIF). It also acquired 4.9% of BaltCap Latvia Venture Capital Fund.Both fund acquisitions were established by the private equity and venture capital firm BaltCap as part of the European Commission and EIF’s Joint European Resources for Micro to Medium Enterprises (JEREMIE) initiative.On INVL Asset Management’s website, CIO Vaidotas Rūkas explained: “Our strategy is to steadily increase our pension funds’ investments in Lithuania and the other Baltic states, thereby contributing to these countries’ economic growth and seeking to earn an attractive return for the clients of the pension funds.”High-equity funds top performance chartsLithuanian pension fund results, the higher-risk vehicles have continued to generate the best returns.As of the end of June, according to the Bank of Lithuania, the highest average year-to-date return came from the high-equity funds (3.27%).Medium-equity funds gained an average 1.78%, low-equity funds gained 0.55%, and conservative funds lost 0.49% on average.In the case of third-pillar funds, equity vehicles returned 3.4%, followed by bond funds (1.29%) and mixed investment (1.25%).last_img read more

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Multinational Dow to concentrate European DC plans in Belgium

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first_imgChemicals giant Dow is to concentrate its European defined contribution (DC) schemes in a Belgium-based cross-border pension fund, starting with its Dutch DC plans.It is to place the Dutch DC plans – with combined assets of €45m and 1,900 participants – with UnitedPensions, the cross-border vehicle of Aon Hewitt.However, Dow’s current closed defined benefit (DB) plan in the Netherlands, comprising €2.5bn of pension assets, will remain with its Dutch pension fund, the company made clear in a newsletter.Ed d’Hooghe, Dow’s director of human resources and vice chairman of the Dutch scheme, said the firm’s DC scheme in the UK was to be next to join United Pensions, to be followed by its DC pension funds in Belgium, France, Germany, Italy and Spain. He made clear the decision was aimed at achieving benefits of scale and costs savings, as well as improving the portability of pensions for staff moving between countries. Dow to relocate DC schemes to Belgian cross-border fundCurrently, Dow has three DC plans in the Netherlands, two of which are being implemented by a low-cost DC vehicle (PPI), i-PensionSolutions, and the third by Dow Pensioenfonds itself.D’Hooghe indicated that the decision to relocate the Dutch pensions was in part triggered by the PPI contracts expiring and Dow developing plans for European DC arrangements.“After comparing the propositions of Dutch PPIs, we concluded that the international option would be the best.”According to d’Hooghe, UnitedPensions’ life cycle came on top in a survey by consultants Mercer and Milliman.He said that the pan-European pension fund would also be cheaper to run in the longer term after more Dow schemes have joined.“As we are satisfied with the current solution, starting a cross-border DB pension fund does not seem to be efficient”Ed d’Hooghe, Dow director of human resources and vice chairman of its Dutch schemeIn conformity with Dutch legislation, the Dutch participants of the cross-border scheme will have the choice between fixed and variable benefits after retirement, and will also be entitled to shop around for the best deal.However, Aon Hewitt in Belgium will also offer benefits, Dow made clear.The company’s Dutch pension fund will continue to independently implement its remaining DB plan.According to its vice chair, it had a sufficient number of active participants and funding of 117.5% as at the end of November.“We want to improve coverage to more than 120% and subsequently start reducing investment risk,” said d’Hooghe.He said that setting up a pan-European DB scheme, as Dupont, BP and ExxonMobil have done, was not a priority for Dow.“This would require a significant transition. As we are satisfied with the current solution, starting a cross-border DB pension fund does not seem to be efficient,” he explained.last_img read more

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British Airways settles six-year dispute with pension fund

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first_imgBritish Airways (BA) has reached a settlement with the trustees of one of its two defined benefit (DB) pension schemes in relation to disputed discretionary benefit increases.The airline has been in dispute with the trustees of the £7.7bn (€8.9bn) Airways Pension Scheme (APS) since 2013 over a 0.2% additional uplift in benefits, which the company had said risked making it harder for the scheme to close its funding deficit.The two parties were scheduled to meet in the UK’s Supreme Court later this year after the trustees appealed against the latest ruling. However, improvements in funding levels and a major de-risking transaction have made the additional payments more palatable for BA, according to a letter to members from the APS trustees.The agreement between BA and APS means the trustees will be permitted to award further discretionary increases from 2021 to ensure benefits keep pace with RPI inflation. The increases will be subject to “some affordability tests”, the trustees said. The APS trustees said they had agreed with BA that the terms of the legal settlement “better serve the interests of the members as a whole than proceeding with the appeal”.Once the settlement is approved by the UK High Court, payments would be made “as soon as practicable, backdated to 8 April 2019”, the trustees added. Source: BABritish Airways first disputed the discretionary payments awarded by the trustees in 2013As well as future discretionary increases, the settlement also includes a one-off lump sum payable to pensioners to compensate for the lack of discretionary increases between 2013 and 2019, the period of the litigation process between BA and APS. This is estimated to be worth about 4.6% of pensions in payment as of 31 March 2019.“Certain increases” would be granted to pensioners and deferred members relating to this period as well, according to the APS trustees. Next year, members will receive a benefit increase equal to 75% of the difference between RPI inflation and CPI inflation.In return for the increases being permitted, BA will stop making deficit recovery contributions to APS. Payments would restart if the scheme’s funding level fell below 100%, the trustees said.The trustees said the discretionary increases were expected to be affordable without additional payments from the sponsor, but BA said it would set aside £40m as a contingency fund.Funding improvementsOne of the main reasons behind the settlement was a £4.4bn insurance buy-in finalised in September 2018, securing more than half of the APS’ liabilities with Legal & General. The deal remains the UK’s largest ‘buy-in’ transaction ever completed.In addition, the funding level of the APS had improved due to a de-risking strategy to shift the scheme out of equities, the trustees said.“Together, these factors have effectively reversed the funding deficit and APS is expected to show a substantial surplus at the next valuation relative to [CPI inflation] increases,” the trustees said. “This surplus would be used to deliver the proposed package of discretionary increases.”The APS entered into a £1.6bn longevity swap transaction with Partner Re and Canada Life Re in September 2017 to insure against increases in members’ life expectancy.The scheme is one of two main DB schemes sponsored by BA. The £16.9bn New Airways Pension Scheme was closed to future accrual from 31 March 2018, and was replaced by a new defined contribution arrangement.last_img read more

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DNB: Lump sum option puts underfunded schemes at risk

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first_imgThe association of pension specialists (KPS) said it wondered why taking out a lump sum would be possible at underfunded schemes, whereas individual value transfer of pension rights was not allowed in such a situation.Trade union VCP, in contrast, argued that participants using the lump sum option at well funded schemes would miss out on indexation over the amount taken out.Earlier, tax experts argued that the new lump sum option at retirement would unlikely be beneficial because of a higher taxation.The Dutch order of tax advisers (NOB) suggested that the lump sum could turn out to be disadvantageous, as people could end up in a higher tax band, or lose housing benefits and care subsidies. Dutch pensions supervisor De Nederlandsche Bank (DNB) has argued that the proposed legislation of a 10% lump sum withdrawal at retirement would come at the expense of participants of underfunded schemes.As surpluses and shortfalls at pension funds don’t have to be taken into account when requesting such withdrawals, this could lead to “undesired selective behaviour”, the regulator stated in a response to the consultation on the country’s recent pensions bill.DNB noted that retiring participants would get an additional stimulus to avoid a looming rights cut, “as they would actually receive more than their pension fund has available”.It also argued that taking out a lump sum at underfunded schemes would further put a pension fund’s financial position at risk.last_img read more

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Mandate roundup: Denmark’s newly-merged Norlys seeks pensions manager

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first_imgNorlys, the Danish electricity, television and telecommunications firm formed from a big merger last year, is on the hunt for a pensions and insurance firm to take over the management of all the various pension schemes and employee insurance contracts it is inheriting.The company, formed from the companies SE and Eniig, is inviting tenders for a comprehensive contract for a list of pension and insurance schemes of Norlys Holding and its underlying companies, according to a notice on the EU’s TED public contracts site.Norlys said other firms it acquires or merges with during the contract period may also be included in the schemes it listed in the tender, on the same terms.The company Eniig Fibernet, which Norlys said was expected to be set up 1 October 2020, is also part of the tender. The pension and insurance schemes listed by Nordlys are currently managed by PFA Pension, Velliv and Danske Sundhedsforsikring, according to the tender notice.Norlys said it currently has around 2,500 employees, and that the potential deposit value of the pension assets to be managed is estimated at DKK1bn (€134m) with average annual contributions of around DKK140m.The deadline for receipt of tenders is noon local time on 14 August 2020.Swiss pension fund issues notice for active equityA private pension fund in Switzerland has issued an active long equity volatility investing notice via IPE Quest Discovery.The size of the global active pooled portfolio is to be advised later in the selection process, it said.The pension fund is looking to build a long list of managers in this asset class that may then be selected to reply to a full request for proposals, it added.Interested managers should have a minimum track record of three years, the notice said.The IPE news team is unable to answer any further questions about IPE Quest, Discovery, or Innovation tender notices to protect the interests of clients conducting the search. To obtain information directly from IPE Quest, please contact Jayna Vishram on +44 (0) 20 3465 9330 or email jayna.vishram@ipe-quest.com.Danish research foundation re-appoints NykreditDanmarks Grundforskningsfond (DG), the Danish National Research Foundation, has re-appointed Nykredit Asset Management for a DKK2bn (€267m) contract for the management of nominal Danish bonds.The foundation, which issued the initial tender notice on the Official Journal of the European Union (OJEU), said the contract is for a five-year period.DG’s fixed income portfolio invests in government and mortgage bonds and constitutes the largest part of its assets – 37% of the strategic allocation is managed by Nykredit.According to its latest annual report, the Danish bond portfolio yielded a return of 1.8%, which was higher than the benchmark return of 1.7%. The predominance of mortgage bonds with lower coupon (0.5-2%) contributed positively to the excess return in relation to the benchmark.Although the yield spread on mortgage bonds was widened last year, this was more than compensated in the form of higher interest rates on mortgage bonds compared to government bonds and other non-callable bonds, it said.The strategic allocation to global index-linked bonds is worth 11% of its total portfolio and is managed by Danske Bank Asset Management. The portfolio’s return in 2019, the report showed, was 2.8% compared to a benchmark return at 2.6%.The return from the European credit bond portfolio in 2019 was 6.3% compared to the benchmark return of 6.4%. The strategic allocation to this part of the portfolio is 10% and the benchmark is Barclays Capital Euro Major Corporate Index. It is also run by Danske Bank AM.The US high yield bond portfolio accounts for 7% of the strategic allocation, and the portfolio is managed by Columbia Threadneedle. In 2019 it returned 12.7%, which is higher than the 10.7% its benchmark returned (ML US High Yield Bonds, Constrained hedged to DKK).The excess return is due to good securities selection, especially in the energy sector where there were many bankruptcies in 2019, the report explained.Looking for IPE’s latest magazine? Read the digital edition here.last_img read more

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Austrian Pensionskassen association pushes for sustainable investments

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first_imgA privileged tax treatment for employee contributions has been demand of politicians for years, in order to make the pension fund instrument more attractive to savers, Michaela Plank, principal and member of the country leadership team at Mercer Austria, told IPE.“The link [of tax deductions] with sustainable investments is welcomed, especially since pension funds cannot deny the topic of sustainability in the future,” she said.A recent Fachverband survey revealed that Pensionskassen in Austria already invest €15bn sustainably, based on the United Nations’ Principles for Responsible Investment.This represents 61.5% of Pensionskassen’s total investments volume.“The topic of sustainability has already been included by all multi-employer pension providers, at least in their strategy,” Plank said, noting that, however, the access to sustainable investments is currently not regulated, meaning that each pension fund sets its own priorities.For this reason, Plank added, it is necessary to define “uniform regulations” both at the local level and in line with the requirements of the European Union to build a foundation for domestic Pensionskassen to compete internationally. “Our request to the government would be that everyone who pays for a green supplementary pension can deduct it from tax”Andreas Zakostelsky, chair of the Fachverband der PensionskassenResponsible investments rose by 10% in 2019 to €1.7trn in Germany and in Austria, according to research by Forum Nachhaltige Geldanlagen (FNG), the industry association promoting sustainable investment in the DACH region.But in Austria only 17% of asset owners and fund managers surveyed said they pursue impact approaches.“We are seeing increased interest in implementing ESG policies in the investment process, but it would be preferable that all investors view ESG as the standard and focus on the topic of “transformation” and “what impact do I achieve”,” Angelika Delen, head of investment consulting at Mercer, added.Returns from capital deployed in sustainable investments can be attractive from the point of view of investors, especially at a time when the COVID-19 pandemic pushes to rethink business models and growth.“Sustainable investment does not automatically mean higher returns, but they are, meanwhile, at least equivalent, and often more profitable in the long term, as they focus on future-oriented industries,” Zakostelsky said.Andreas Wimmer, senior group managing director at the CQ Investment Group, told IPE that asset managers at the group generally support measures to make sustainable investments available for a larger number of potential investors.The inclusion of sustainable investments within a scheme’s portfolio “should further help to establish common standards and transparency in the industry,” he continued.“In this regard, we think it would be helpful to implement the proposal [of the green supplementary pension] on a voluntary basis,” he added.Returns from sustainable investments have been competitive compared to traditional investments, he said.“We think it could be in the interest of pension funds to increase their allocation in this segment,” he concluded.To read the digital edition of IPE’s latest magazine click here. The Fachverband der Pensionskassen, Austria’s occupational pension fund association, has floated the idea of a “green supplementary pension” to push pension funds torwards sustainable investments.“We are convinced that this measure would increase the proportion of sustainably invested capital to more than 75% by 2025,” Andreas Zakostelsky, chair of the Fachverband, told IPE.The basic idea behind the “green supplementary pension” is that pension funds create pots with tax-deductible contributions dedicated only for sustainable forms of investment.“Our request to the government would be that everyone who pays for a green supplementary pension can deduct it from tax,” Zakostelsky said.last_img read more

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