Month: September 2020

UK regulator reprimands itself over missed risk management targets

first_imgThe UK Pensions Regulator (TPR) has failed to convince more than half of UK pension trustees to pursue an integrated risk approach, requiring them to take account of a scheme’s funding, investment and covenant risk.As the organisation published its 2013-14 annual report, the regulator’s new chairman, Mark Boyle, said the past year had seen a number of “significant” milestones.Noting that TPR had aimed to drive up standards among defined contribution (DC) schemes, he also stressed the importance of its work in the defined benefit (DB) sector.“We have also redefined our approach to DB regulation by consulting on a new code of practice that explicitly balances an employer’s sustainable growth with the regulator’s other statutory objectives.” However, according to the regulator’s own targets, it was unable to win over a sufficient number of DB trustees and convince them of the need for an integrated approach to monitoring risk.It said only 42% of trustees surveyed in the fourth quarter of 2013 said they employed a fully integrated approach, well short of its target of 54%.Under its own traffic-light rating system, this resulted in the regulator classing its efforts as red, whereby a target was “missed by a significant degree”.The results come after TPR admitted it would reduce the budget available for DB regulation by 10%, as it nearly doubled the funds available to deal with the rollout of auto-enrolment.Last year, as it launched a consultation on its DB code of practice, it said the idea of an integrated risk approach was key to achieving good funding outcomes.The regulator also said it failed to respond to funding proposals as quickly as hoped, responding to 80% of the 1,649 received last financial year within about four and a half months, rather than its target of three months.Both employers and consultants were also unfamiliar with the regulator’s six principles for DC funds, with only 12% of employers and 52% of consultants aware of the guidance – against a target of 60% and 90%, respectively.However, it was more successful in improving scheme record-keeping, exceeding by 3 percentage points its target of 70% of funds having all required data to qualify.,WebsitesWe are not responsible for the content of external sitesLink to The Pensions Regulator’s annual reportlast_img read more

Denmark brings foward pension tax charges to lower deficit

first_imgAdditionally, those with savings in Lønmodtagernes Dyrtidsfond (LD) will be allowed to withdraw their savings with a slightly increased tax rate of 2.7% – or to pay off the accrued tax liability in 2015 without withdrawing their savings from LD.Forsikring & Pension (F&P), the Danish pension and insurance association, said the Treasury was taxing income at the expense of future treasury receipts.Per Bremer Rasmussen, the association’s chief executive, said he accepted the government’s argument that the change was needed to sidestep a further excessive deficit procedure.However, he said the move was at the expense of the welfare of future generations and urged the Finance Ministry to instead focus on measures that would bring about real growth.He added that the money would be “missing from the Treasury when parents are in nursing homes”. The Danish pension association has criticised changes to pension taxation as simply a means of reducing the country’s budget deficit while damaging its welfare state.Finance minister Bjarne Corydon said the government needed to pursue a “responsible economic policy” and therefore was altering the level of tax rebate offered to pension savers in an effort to reduce the deficit by 0.75% of GDP.Denmark is taking the measures to ensure it does not exceed the EU’s 3% deficit target, after the European Commission earlier this year concluded a previous excessive deficit procedure.The tweaks to taxation for lump-sum pensions (kapitalpensioner) come on the heels of prior changes that allowed beneficiaries to lower their tax liability to the old-age savings vehicle (aldersopsparing).last_img read more

UK pension funds shy from liability-matching in favour of alternatives

first_imgUK defined benefit (DB) pension funds have slowed their shift towards risk-reducing fixed income investments while allocations to alternatives saw a bump, latest figures reveal.The data comes from The Purple Book, the most authoritative set of DB statistics, published and analysed by The Pensions Regulator (TPR) and the Pension Protection Fund (PPF).In its ninth year, The Purple Book shows the DB universe of 6,057 schemes has collated assets of £1.13trn (€1.43trn) as of the end of March 2014, with a funding level of 67% on a full buyout basis.The book showed DB schemes had begun to level out a shift from UK Gilts toward corporate fixed interest and index-linked bonds. Index-linked bonds accounted for 41.1% of the total bond allocations, an increase of 20 basis points from 2013.However, allocations increased by 8.3 percentage points between 2009 and 2013, with significant jumps year on year.This trend was at the expense of UK Gilts, which saw its share of bond investments fall by 10.5 percentage points over the same period. However, that has now increased by 10bps over the last year.Overall, scheme allocations to bonds fell by 10bps to account for 39% of investable assets.Stephen Rice, the PPF’s chief actuary, said there was no concrete reason for the levelling-out, but he suggested it might have to do with the pricing of assets.“It has been levelling off,” he said. “If I were asked to speculate as to why, I would suggest it is because [index-linked bonds] are very expensive. Real yields are pretty much negative.”He also said the slowdown in a shift from equities might also be due to the costs of switching.A trend of outflows from equities did continue, with allocations now accounting for 39.4% – an 80bps drop and the first time it has fallen below 40% since the Book’s inception.However, within equities, the shift away from UK stocks towards global and unlisted ones was also a strong trend.Private equity now accounts for 8.7% of equity allocations, having only accounted for 1.9% in 2009.Overseas equities’ share of allocations rose by 1.1 percentage points to 62.4%, with these stocks now accounting for more than double that of UK stocks, which take up 28.9%.The rise of alternatives, excluding property, continued, as hedge-fund allocations rose by 1.2 percentage points to 6.2% and ‘other’ asset classes rising 40bps to 3.9%.While risk-reduction in investment portfolios had levelled, other measures used by DB schemes were on the up.Schemes covered by the Book received around £25.6bn in deficit-reduction contributions, as the average recovery plans increased to 8.4 years.Buy-ins, buyouts and longevity hedges also reached a new peak over the year, with the 15 months from the start of 2013 seeing £24bn of these arrangements – in around 270 deals – an increase of more than a 100.Andrew McKinnon, PPF CFO, said: “The Purple Book has shown a slowdown in de-risking, demonstrating the steady decline has levelled off and could point to the end of a long-term trend.”last_img read more

Elo reorganises investment department after Grannenfelt departure

first_imgEeva Grannenfelt, head of corporate lending at Finland’s Elo, has left the pensions mutual after less than two years in her role.Grannenfelt – named Elo’s director of corporate lending, alternative investments and macro views when the provider was created from the merger of Pension Fennia and LocalTapiola in January last year – has left to pursue new opportunities, according to a company spokeswoman.Her departure has seen her responsibilities split between two other members of the €20bn mutual’s investment team.Effective immediately, director of real estate Timo Stenius will take on responsibility for private equity and corporate finance. Jonna Ryhänen, responsible for equities, fixed income and currency, will also take charge of all hedge fund investments.Both will report to Hanna Hiidenpalo, who will remain as Elo’s CIO.Prior to the two providers’ merger, Grannenfelt was CIO of Pension Fennia and also served as its director of capital markets and investment director.Last month, she was appointed to the board of Finnish software provider Solteq.last_img read more

ABP introduces ‘temporary’ average salary for MoD staff

first_imgThe Dutch civil service scheme ABP has changed pension arrangements for military staff from final to average salary as of 1 January on a “temporary basis”.The €418bn pension fund said it had made the change while it was waiting for a “new and sustainable” pension plan to be agreed by trade unions and the Ministry of Defence (MoD).The move follows contradictory verdicts in two summary proceedings about a permanent transition from final to average salary arrangements. The cases were brought by the trade unions against the employer and the pension fund, respectively.The unions have demanded that the final salary plan should be continued until a new draft agreement with the employer about average salary arrangements had received the approval of union members. ABP’s head office ABP and the MoD, for their turn, wanted to introduce the average salary plan as of 1 January 2019, with the ministry arguing that the final salary arrangements were too expensive.ABP has said that its IT system could no longer cope with the current pension scheme for the military and that it no longer wanted to improvise administering the final salary plan.In the unions’ case against the MoD, the judge decided that the unions had to accept the new average salary plan for this year, following an agreement with the employer made in 2017.However, in the opinion of the judge handling the unions’ case against ABP, the civil service pension fund could continue to provide a final salary plan for the military staff.Citing ABP’s provider APG, the judge said that a “pure final salary plan was one of the easiest to implement”.He concluded that ABP had brought the problems upon itself by not keeping a separate IT system for the MoD staff when it switched to an average salary plan for the 95% of its participants who weren’t military personnel in 2004.The judge decided that ABP was no longer allowed to communicate that the average salary plan for MoD staff would be introduced as a fact.Commenting on the verdicts, a spokeswoman for ABP said that, as the social partners hadn’t reached a final agreement, its call centre wouldn’t use the expressions ‘final salary’ and ‘average salary’.Last week, ABP’s website still referred to the final salary plan for military staff would cease, but the MoD’s website said its personnel were subject to average salary arrangements.last_img read more

Co-op scheme adopts ESG fund for DC default

first_imgThe multi-asset fund, which is aimed at DC schemes, was added to LGIM’s Future World range in June last year. It primarily holds equity and bond index funds that incorporate ESG considerations via tilts to the underlying standard indices, where this is deemed feasible or meaningful.It also incorporates LGIM’s pledge to engage with companies to speed up action to tackle climate change, divesting holdings within the Future World funds where it judged this to be necessary.The first Future World fund was developed in collaboration with HSBC Bank UK Pension Scheme, which has been using it as the equity default fund for its DC scheme from January 2017. The Future World Fund is a multi-factor global equities index fund that aims to address investment risks associated with climate change.The £11bn (€12bn) Co-operative Group Pension Scheme is the retailer’s largest pension scheme. Its defined benefit section was closed to future service accrual in 2015. The Co-operative Group Pension Scheme has selected the multi-asset fund within Legal & General Investment Management’s Future World range as the default fund for its defined contribution (DC) section.Around £290m (€323m) of the £315m DC assets would therefore be invested in “companies and bonds that score heavily when it comes to environmental, social and corporate governance performance,” Co-op said in a statement.Gary Dewin, director of pensions at the Co-op, said: “In making this decision the trustees were keen to provide a default fund for Co-op colleagues with a proven investment track record, but which also aligns with the Co-op’s own sustainability agenda and ethos.”Emma Douglas, head of DC at LGIM, added: “We’re seeing increased demand from pension scheme members for investments which are aligned to their values – for example a recent survey we commissioned found that almost 60% of scheme members said it was important that fund managers actively consider ESG issues such as climate change, levels of diversity and executive pay when choosing the companies in which to invest their money.”last_img read more

Church of England creates risk-focused strategy role

first_imgHe told IPE the new appointment was not a material change in strategy but an evolution of the existing strategy for the Commissioners’ investment portfolio.  The Church of England’s investment arm has appointed James Barty to the newly created position of director of investment strategy.He was previously head of global cross-asset strategy and European strategy at Bank of America Merrill Lynch, a role he held since March 2016. He also spent 16 years at Deutsche Bank, latterly as head of global equity and asset allocation, before co-founding the bank’s spin-out Arrowgrass Capital Partners, where he was head of macro strategy.At the £8bn (€8.9bn) Church Commissioners for England, Barty will report to Tom Joy, the Commissioners’ chief investment officer.Joy said: “[Barty] will be bringing his impressive track record in multi-asset investing at a critically important time for investors. We expect the next decade for markets across all asset classes to be very different to the one we have just experienced and managing overall portfolio risk, more dynamically, will become increasingly important.” James BartyThe CIO added: “We wish to add internal resource focused on asset allocation, strategy and overall portfolio risk and doing this will allow us to be more nimble and dynamic, which we believe is going to be more important in the next decade compared to the one we have just experienced.“This is especially important, we believe, at a time when traditional portfolio hedges like fixed income offer such poor prospective returns in real terms.”Barty said he had been “greatly impressed” by the Church Commissioners’ approach and its focus on responsible investment.His appointment follows the hire of Mary-Pat Barron as head of equities earlier this month. She joined from US investment firm Sawdust Investment Management Corporation to run the Commissioners’ £3.5bn equity portfolio.last_img read more

CEPB £600m brings to life new global energy transition index

first_imgThe Church of England Pension Board (CEPB) has allocated £600m (€712m) to an energy transition index it developed in collaboration with FTSE Russell and the Transition Pathway Initiative (TPI), which it co-chairs.According to the £2.4bn CEPB, the new index is the first global index that enables passive funds to capture company alignment to the 2015 UN-brokered Paris Agreement on climate change.On Twitter, TPI hailed the index as ground-breaking and “a catalyst for much-needed investor/passive funds’ action on climate change”.CEPB said it had worked on the development of the index over the past year-and-a-half as it sought to integrate the insights of the TPI into its passive investments. CEPB was a co-initiator of the TPI, which provides assessments of how individual companies are positioning themselves for the transition to a low-carbon economy through a public, transparent online tool. The new FTSE index embeds forward-looking data from the TPI, which tracks whether companies have public targets to align themselves with warming scenarios of 1.5°C or 2°C above pre-industrial levels.Those companies that do not have such targets are either significantly underweighted or excluded. In the oil and gas sector, for example, Shell and Respol are included in the index while BP, Chevron and ExxonMobil currently are not.“We have developed an answer that enables passive investors to play their part in supporting the goals of the Paris Climate Agreement”Adam Matthews, director of ethics and engagement for the CEPB and co-chair of the TPI Adam Matthews, director of ethics and engagement for the CEPB and co-chair of the TPI, said: “Working over the past 18 months we have developed an answer that enables passive investors to play their part in supporting the goals of the Paris Climate Agreement.“The message is clear to all publicly listed companies: put in place targets and strategies aligned to Paris and be rewarded with inclusion in the index, or work against the long term interests of beneficiaries and wider society, and be excluded.”The pension fund is keen for other asset owners to follow it with passive mandates tracking the new index.“We invite all other pension funds that are passively invested to join us […], and not to simply disinvest but incentivise companies to transition whilst having real world consequences for those that do not do so and put at risk achieving a net zero world,” said Clive Mather, chair of the CEPB.Climate metrics improvedThe £600m CEPB is allocating to the new index represents the entirety of the pension fund’s passive investments, which used to track a modified version of the MSCI world index. The carbon intensity of the portfolio has been slashed by nearly half (49.1%) as a result of the new allocation. Adam Matthews, CEPBThe index methodology leads to a 35% increase in exposure to green revenues, while exposure to fossil fue reserves and operational carbon dioxide emissions are reduced by 69% and 36%, respectively.The allocation to the new index, officially called the FTSE Developed ex-Korea TPI Climate Transition Index, comes after CEPB recently pledged to render carbon-neutral its entire portfolio by 2050 as a member of the Net Zero Asset Owner Alliance.CEPB also has a commitment that by 2023 it will have divested from all companies that, according to a TPI assessment, have not set off on a path to aligning with the goals of the Paris Agreement.CEPB runs assets on behalf of three church pension schemes.last_img read more

Rochedale’s skyrocketing popularity boosts median above inner-city faves

first_imgThe new Hydeberry estate at Rochedale by Mirvac opened this year.Rochedale has become an attractive suburb for those who prefer a new house to a pre-existing property or apartment closer to the city.According to CoreLogic data, the suburb median house sale price had risen 6.1 per cent in the 12 months to September, from $914,000 to $970,000.In comparison, Kangaroo Point had a median of $945,000, Grange $957,500, Indooroopilly $865,000, and Windsor $780,000. LJ Hooker Sunnybank Hills agent Emily Xiong says there is a shortage of stock.More from newsParks and wildlife the new lust-haves post coronavirus15 hours agoNoosa’s best beachfront penthouse is about to hit the market15 hours agoLJ Hooker Sunnybank Hills agent Emily Xiong said a demand in stock was what pushed up the median.“It is short of stock at the moment,” Ms Xiong said. “I still have a lot of buyers looking to buy.”The suburb almost tripled in population over five years, with the Australian Bureau of Statistics finding 3175 people called the suburb home in 2016, up from 1092 in 2011. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:51Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:51 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD576p576p432p432p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenStarting your hunt for a dream home00:51It is on the cusp of Brisbane’s south and Logan’s north, but this suburb has a median house sale price more than Kangaroo Point, Grange, Indooroopilly and Windsor.center_img The sale of 29 Glenmore Cres, Rochedale, was the top sale of the year.Ms Xiong said properties being purchased in the suburb’s new estates were being bought by young Asian people and their extended families.“Most of them are owner occupied,” Ms Xiong said.“It is a very popular new estate, close to the school and a few new shopping centres.”Census data also revealed Asian was the most common ancestry, and 60.8 per cent of residents reported both of their parents were born overseas.CoreLogic data also revealed the highest sale of the suburb for 2018 to be $3.6 million for the five-bedroom, five-bathroom home on 1.01ha at 29 Glenmore Cres.last_img read more

Gold Coast mansion the epitome of contemporary living

first_img34 Admiralty Drive, Paradise Waters.From its towering front entrance to its curved feature staircase, every inch of the house has a cutting-edge style.It is one of the reasons owner Kevin Chatfield fell in love with the home.“I watched it being built and just loved the modern design,” he said.“But I was single at the time and wondered who would live in such a big home. “Four years later, after meeting my lovely wife Vicki, we purchased the home.”The couple have lived in it for the past eight years.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 agoMORE NEWS: NRL star sells Gold Coast house 34 Admiralty Drive, Paradise Waters. MORE NEWS: New look at Hemsworth’s mega mansion While the house is large with five bedrooms and seven bathrooms, Mr Chatfield said it was “really easy” to maintain.It has a seemingly endless list of features, including a theatre room, office suite, a heated plunge pool, 20m lap pool, an open entertaining terrace and billiards room. 34 Admiralty Drive, Paradise Waters. 34 Admiralty Drive, Paradise Waters. 34 Admiralty Drive, Paradise Waters.“I worked from home a lot and my study looked straight across the pool and onto the river. I loved that view.”He said it formed a picturesque backdrop when entertaining guests on the top level.“We also really liked the (top level) bar area — it has amazing 360 degree views of Surfers Paradise, which is fantastic both daytime and even more at night,” Mr Chatfield said.“(It’s a) great place for both small or large groups for entertaining both inside and out.” “Vicki also turned a bedroom overlooking the river into her boutique wardrobe, which is every woman’s dream and every man’s nightmare.”The couple have decided to sell as they have bought another Gold Coast penthouse that supports their travelling lifestyle. 34 Admiralty Drive, Paradise Waters. 34 Admiralty Drive, Paradise Waters.RISING four storeys above the riverfront in a prestige enclave of Surfers Paradise is a house that epitomises contemporary living.With a fully-equipped gym, steam room, wine cellar and marble bar among its standout features, this extravagant residence offers a glimpse of what it’s like to live a luxurious life in the modern world.The statement residence at Paradise Waters certainly looks the part. 34 Admiralty Drive, Paradise Waters.There are three ensuited guest bedrooms on the first floor and another on the ground floor. The riverfront main bedroom, also on the first floor, has a balcony, walk-in dressing room and spa ensuite.The property also has an internal lift with access to all four levels as well as video intercom entry, electric front gates and blinds, a CBUS home automation system, video security, a water tank and solar panels.Soaring floor-to-ceiling windows frame sweeping views of the river and Surfers Paradise skyline.This was one of Mr and Mrs Chatfield’s favourite parts of the home.“My wife and I are mad boaters and we had a couple of different boats moored on the river side behind our home,” Mr Chatfield said. 34 Admiralty Drive, Paradise Waters.last_img read more