May 10, 2021

MF Global pension fund agrees £52m buyout with PIC

first_imgAfter this, the trustees of the scheme discussed with the special administrators an early settlement of their claim against the MF Global group, it said.The trustees were trying to secure benefits for fund members that were broadly the same as pension promises made before the corporate collapse.The buyout deal was completed on 15 October, and the fund would now fully exit its PPF assessment period, KMPG said.Chris Martin, managing director of Independent Trustee Services, the professional trustee to the fund, said: “I am delighted we have been able to help deliver such a successful outcome for all members.“This has only been possible as a result of the open and constructive dialogue with the administrators, the creative approach of our advisers and PIC, and the tireless efforts of the whole trustee board.”Richard Heis of KPMG said: “Using modelled returns between the different MFG companies, we ensured the deal is win-win for MFG and the members.”The trustees were advised by LCP and Pinsent Masons. The UK pension fund of the now defunct financial group MF Global has agreed a £52m (€61m) buyout for fund liabilities with Pension Insurance Corporation (PIC).The buyout completion happened at the same time as the conclusion of settlement negotiations with KPMG as special administrators of MF Global UK, KPMG said.MF Global, formerly known as Man Financial, was an international financial brokerage firm that went into special administration in the UK in October 2011 following the worldwide collapse of the group.The UK pension fund entered a Pension Protection Fund (PPF) assessment period, and was significantly underfunded on a buyout basis, KPMG said.last_img read more

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Industry veteran Loek Sibbing to leave Univest Company

first_imgLoek Sibbing has announced that he is to step down as chairman of Univest Company, the €20bn asset manager for the 80 pension funds of multinational company Unilever, on 1 June.Sibbing has spent the last four years managing Univest Company, having worked as director of Progress, Unilever’s €4.5bn Dutch pension fund, for five years.The scheme closed in 2013 with a funding ratio of 139% and is one of the pension funds with the best financial positions in the Netherlands.Sibbing said he would now take on “new challenges” and that he wanted to share his experience and expertise with other companies. He said it was too early to make further announcements about the next step of his career.Before Sibbing joined Unilever, he was director of the pension fund of building company Volker Wessels.Between 2005 and 2010, he was chairman of the Foundation for Company Pension Funds (OPF), which is now part of the Pensions Federation.Sibbing said there would not be a successor for him at Univest Company, which is to reduce its leadership team to Mark Walker, global CIO, and Frans Meerveld, chief operations and risk officer.last_img read more

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Devon pension fund opts for multi-factor smart-beta over active mandate

first_imgIts new mandate will require a mix of value, quality and low-volatility strategies, while avoiding single-factor dependency.This should be provided on a fixed-allocation basis rather than a dynamic-allocation approach, with investments global and unhedged.It said interested managers should use widely recognised benchmarks, and that investments should be managed on a long-only basis.Devon Pension Fund said it would only consider managers with a breadth of experience that manage a minimum of £2.5bn in alternative indexation strategies.At the end of June, the fund allocated 60% of assets to listed equity, split 20-40% between active and passive strategies, respectively.A move away from active management had already begun from March 2013, where the fund allocated 23% to active management and 37% to passive.The general use of alternative indexation strategies has grown in recent years, with significant uptake in 2014.European institutional investors are expected to invest as much as €211bn in smart-beta strategies by 2017, according to market intelligence provider Spence Johnson.However, this will be at the expense of both active and passive mandates, with research from State Street Global Advisors (SSgA) showing that 75% of institutional investors see smart beta as a replacement for passive strategies and 64% for active.The pension fund’s latest published report showed it invested with SSgA and UBS Global Asset Management for its passive exposure.It also used Aberdeen Asset Management and the soon-to-be-dismissed Sarasin and Partners for its global active exposure.The fund also has 15% invested in diversified growth funds, managed by Baring Asset Management and Baillie Gifford.In January, the fund said it would cut its equity exposure, as it had overshot its target by £150m.In turn, it moved the assets into infrastructure, investing £40m with Aviva Investors and $50m (€37.2m) with First State.The move away from equities to infrastructure came as the pension fund’s committee acknowledged that it had strayed from its strategic asset allocation, and that its low exposure had failed to generate enough diversification within the fund.However, it still remains 5 percentage points above its targeted equity holdings and 2 points below for infrastructure. The £3bn (€3.6bn) Devon County Council Pension Fund is to allocate £250m to a smart-beta equity strategy, while disinvesting from an active mandate.Launching a tender, the fund said it was seeking to appoint a manager for an alternative indexation equity mandate, made up of a blended strategy.The fund also decided to terminate its mandate with Sarasin and Partners, an investment manager currently operating an active global equity strategy for the scheme.According to committee minutes from September, the termination of the contract will coincide with the launch of the tender for the smart-beta strategy.last_img read more

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DNB: 160 Dutch pension funds must now submit recovery plans

first_imgTwo-thirds of Dutch pension funds will have to submit recovery plans with regulator De Nederlandsche Bank (DNB) due to funding shortfalls arising from the new financial assessment framework (nFTK).However, out of the 160 underfunded schemes, only one is likely to apply a rights cut, according to local financial news daily Het Financieele Dagblad (FD).Sacha van Hoogdalem, a partner at pensions adviser Ortec Finance, told the FD: “Under the new regime, the recovery options are that extensive that rights cuts will only be required if a pension fund is financially in very bad shape.”However, Dennis van Ek, an actuary at Mercer who assisted several schemes with their recovery plans, said he did not expect rights discounts anywhere. “Only if a scheme’s coverage ratio has decreased to less than 80% or 90% will cuts be required to recover within the legal period,” he told the FD.Depending on a pension fund’s investment portfolio, the nFTK prescribes a funding of approximately 120%.The new rules allow schemes to even out a shortfall over a 10-year period, which has been extended to 12 years in the current transition phase. And because of the new rules, combined with the effect of low interest rates, pension funds can factor relatively high extra returns into their recovery plans, the FD said.“As a consequence of low interest rates,” it added, “schemes’ liabilities would hardly increase in these prognosis, while they are allowed to draw on future returns on equity of 7%.”Van Ek and Van Hoogdalem said only a few pension funds had based their recovery plans on pension contributions. The FD added that an increasing number of schemes opted for lower premiums than necessary when drawn from interest rates by basing them on expected returns.Both pension advisers said Dutch schemes had been under great pressure – having not only to submit recovery plans before 1 July but also to decide on investment profiles, among other things.last_img read more

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Dutch pension system too obsessed with capital funding, says Frijns

first_imgThe Netherlands, with its predominantly capital-funded pensions system, should reconsider the current balance between capital funding and pay-as-you-go (PAYG), as the latter is currently more attractive, according to Jean Frijns, former CIO at the large civil service scheme ABP.Speaking at a book launch, Frijns argued that, in light of low interest rates, it made sense to place more emphasis on PAYG for the AOW state pension.He said a gradual transition to higher AOW benefits would also partly resolve some current problems in the Dutch pensions system, such as pro-cyclical effects as well as the fact that many self-employed workers (zzp’ers) only accrue AOW rights.Frijns said there had been no debate on capital funding versus PAYG since the 1950s and that the “glorification” of the capital-funded system had “continued for too long”. He said a gradually increased AOW could ease transitional problems caused by the planned abolition of the average pensions contribution.The former CIO, who chaired a government-appointed committee looking into investment policy and risk management at pension funds in 2008 and 2009, also claimed the Dutch system still faced “structural weaknesses”.He said these vulnerabilities had increased despite improvements in pensions provision and governance, arguing that the system had become a “plaything” of the markets because of its capital funding.“The low interest rates combined with the effect of the new financial assessment framework (nFTK) has doubled the scale of pension funds and made them too big relative to average earning and GDP,” he said.Frijns further argued that premiums were pro-cyclical, that pension funds contributed to the national savings surplus and that the system hindered labour mobility.The industry veteran predicted the new pensions system would provide for individual accrual and annuity-based benefits, carried out for ring-fenced categories of participants within pension funds.This, he said, will tackle the structural conflict between the generations in the current collective system.However, Frijns was sceptical that the government would tackle problems arising from the dividing up of pension funds’ assets or the cost of abolishing the average contribution.He said the government was likely to leave these for pension funds to solve.He also argued that regulators DNB and AFM were “co-governing” too much.“Focusing too much on costs and outsourcing details comes at the expense of participants’ interests, as well as the risk/return ratio,” he said.Frijns recently stepped down as supervisory chairman at Delta Lloyd following a dispute between DNB and the insurer’s executive board about a derivatives transaction.last_img read more

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Pensions Caixa 30 returns 3.1% on back of equity performance

first_imgPensions Caixa 30, the employees’ pension scheme of Spain’s Caixabank (La Caixa), has returned 3.1% on its investments for the 2015 calendar year, following the previous year’s return of 9.1%.This takes the average annual return for the three years to 31 December to 7.2%, with 6.4% for the five years to that date.The pension fund – the largest corporate scheme in Spain, with €5.8bn-worth of assets – had 35,799 active members, 2,898 deferred members and 8,292 retirees.During 2015, fixed income made up an average 47.1% of the scheme’s investments, with 39% in equities and 13.9% in alternatives. Over the year, fixed income returned 3.1%, with equities returning 7.6% and alternatives 3.9%.In its commentary on the results, the scheme said that, while emerging markets equities made losses, developed market equities fared well.Alternatives suffered from the poor performance of commodities, the worst-performing of all the asset classes in the scheme’s portfolio. Pension Caixa 30’s control commission decided to lower the scheme’s benchmark equity exposure for 2016 from 34% to 30%, while reinforcing the use of options to hedge against volatility and extreme risks.The report said the market turbulence in January 2016 proved this measure to be justified.The benchmark weighting for fixed income is being raised from 48% to 50%, allowing diversification into public debt outside the euro-zone.Meanwhile, an increase from 18% to 20% in the benchmark weighting for alternatives will give greater exposure to capital risk and real assets, in the search for lower volatility in income, the scheme said. “At global level,” it added, “we will continue to diversify, establishing new asset classes, such as frontier market equities, corporate debt for non-euro-zone countries and emerging markets, and alternative credit.“In contrast, we will reduce exposure to soft currencies, following two years of appreciation in the US dollar, pound sterling and Japanese yen.”last_img read more

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Dutch pensions expert: ‘Never introduce average contribution model’

first_imgThe UK should not introduce the concept of average contributions for the accrual of an occupational pension, a Dutch pensions expert has warned.Speaking at a conference at Cass Business School earlier this week, Anouk Bollen-Vandenboorn, professor of tax law for cross-border pension schemes at Maastricht University, argued that this would come at the expense of younger generations.Younger members of Dutch pension funds paid in relatively more than their older colleagues, she said, and were often not able to reap the full benefits of their contributions at retirement as they often became self-employed during their working career.As a consequence, support among younger workers for the Netherlands’ current pension system was decreasing. The Dutch government has decided to replace the average contribution model with a degressive one as part of pensions reform, meaning individuals’ contributions reduce as they get older. No decision has been made yet over who will pay for the conversion, which could cost up to €60bn in compensation for directly affected scheme participants. Anouk Bollen-Vandenboorn, Maastricht UniversityThe aim of the London conference was to enable pension experts from the UK and the Netherlands to exchange good and bad experiences with their defined contribution (DC) arrangements.DC has been introduced widely in the UK. In the Netherlands, however, no more than 15% of pension fund participants are in a DC plan.Bollen also advised attendees to refrain from capping the tax relief for pension saving “as this would come at the expense of disposable income at retirement”.The Dutch government has limited tax-friendly pensions accrual to approximately €100,000 of a worker’s salary. In Bollen’s opinion, this mechanism should not be used for tax purposes.UK pension experts, for their turn, impressed on their Dutch counterparts that freedom of choice for pension fund members should only be extended if there was a well thought-out default option . They explicitly warned against allowing workers to take out a lump sum from accrued pension rights prior to retirement.Since the introduction of the early retirement option in the UK in 2015 for people aged 55-65, more than €19.5bn had been taken out of more than a million DC pots, according to David Blake, director of the pensions institute at Cass Business School. More than half of these had been fully emptied, he said. David Pitt-Watson, London Business SchoolHowever, he emphasised that the Dutch system should be improved through facilitating pension savings for the more than 1m self-employed workers. Saving should also be made mandatory for this group, he said.David Pitt-Watson, executive fellow at London Business School, said the introduction of shared longevity risk in UK pension arrangements would “generate a much better pension”.He noted that the current lack of this provision had made annuities in the UK “very expensive”. David Blake, Cass Business SchoolBlake added that as much as €50m of pension savings had been lost to scammers , and concluded that the increased flexibility in the UK’s pensions system had hardly contributed to increased pensions saving in DC plans.Stefan Lundbergh, head of innovation at risk manager Cardano, said that even pension experts usually opted for the default pension choice.A suggestion from a member of the audience to limit freedom of choice to apply to just part of a person’s accrued pension assets was widely supported by panellists.During the conference, Alwin Oerlemans, head of pensions strategy at the €475bn Dutch pensions provider and asset manager APG, argued that sharing mortality risk and investment risk in both the accrual and the decumulation phase were the best features in the Dutch pensions system.last_img read more

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Desfossés to leave €30bn French public service pension fund

first_imgPhilippe Desfossés, the chief executive of ERAFP, France’s €30bn public service pension fund, is due to leave the scheme in December, a spokeswoman has confirmed.He has held the post since 2008. The decision to appoint a successor to Desfossés is understood to have been announced at a meeting of the pension fund’s board of trustees at the end of June.The chief executive officer at ERAFP is appointed jointly by the government ministers for public service, the budget and social security.  The spokeswoman for ERAFP, which manages the mandatory pension scheme for around 4.5m civil servants, said it did not yet have official information about Desfossés’ replacement but his departure had been confirmed.Desfossés’ appointment was last renewed in 2013. IPE understands he had indicated wanting to continue in the role beyond 2018. His departure comes at a time of a sweeping pensions reform in France. The government wants to establish a universal system to replace the country’s many mandatory retirement schemes – there are more than 40 – and is currently laying the groundwork for this by way of an extensive consultation process being led by Jean Paul Delevoye, the high commissioner for the pension reform.ERAFP, which is a fully funded scheme in a predominantly pay-as-you-go system, comes under this reform and is supposed to be absorbed by the universal system.The government is also reforming private pensions savings within the framework of the “Pacte” law, which was adopted by the lower house of parliament earlier this month.Desfossés has been a strong advocate of responsible investment and the need for pension funds to take account of climate change. He has been vice chair of the Institutional Investors Group on Climate Change since 2016.He started his career in the French treasury, within the ministry of economy and finance, but also has private sector experience. He worked at AXA Group from 1998 to 2006 and then at Eli Lilly France.last_img read more

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SSGA presents ‘game-changing’ ESG scoring system

first_imgState Street Global Advisors (SSGA) has developed a system for scoring companies on their environmental, social and governance (ESG) practices that it believes will help unlock a shift towards sustainable capital markets.R-Factor, according to the $2.8trn (€2.5trn) asset manager, is “the change needed for ESG to become an integral part of the financial system”.Rakhi Kumar, head of ESG investments and asset stewardship at SSGA, said the system was the first “that puts companies in the driver’s seat and allows them to take the action needed to enhance their scores”.“It is built to address the current challenges with ESG data by removing opaqueness around ESG materiality in the scoring process,” she said. Rakhi Kumar, head of ESG investments and asset stewardship at SSGA“We had the vision that, as an asset manager, just coming up with products was not enough,” she added. “We actually had to do something to engage, to be transparent with companies – and this was the only way we saw of actually helping create sustainable capital markets.”The score is integrated into SSGA’s stewardship process, with the manager screening companies for voting and engagement based on their scores. SSGA discloses the score and the basis for it during engagements with companies.“This gives boards and management teams a roadmap for the specific dimensions that investors are evaluating to assess a company’s sustainability efforts,” SSGA stated. “It also helps companies identify which metrics to disclose and manage to improve future scores, creating a positive feedback loop in the market.”According to Kumar, the benefit of the scoring system’s transparency was with respect to companies and clients.“There is a lot of concern that what is going into an ESG product may conflict with returns, but with this we can explain to clients the financial materiality of the factors we’re considering,” she said.Corporate appreciation“[Companies] are very grateful for the transparency and feel they can actually understand what we’re doing,” she said. “Many of them are saying ‘this is really good, this we can work with’.”She added that SSGA made it clear to companies that the requirements were a minimum, and that they could continue to provide other information if they felt this was necessary for other stakeholders.SSGA worked on the scoring system for about 18 months and went public with it at the end of April.“People are actually starting to realise this is a game changer,” Kumar said, “particularly if you’re really trying to move the needle in terms of getting more financially material data available in the capital markets, and to make it as accessible as financial data.”How it works In building the R-Factor system, SSGA differentiated between environmental and social issues on the one hand, and governance issues on the other.For the environmental and social side, the asset manager turned to the materiality framework provided by the Sustainability Accounting Standards Board (SASB). SSGA noted that other reporting frameworks that pre-dated SASB left it up to companies to define what was material by sector, which had led to inconsistencies in company reporting.Kumar said SSGA wanted to use a commonly accepted transparent framework and not “build a new black box”.Because companies have “yet to fully align their disclosure practices” with SASB – the framework is voluntary and the standards were only recently codified – SSGA takes raw metrics from three different environmental and social data providers.“We have to leverage multiple sources of data to improve coverage but also to take out any variations or noise that comes from the low correlation between the different data providers,” said Kumar.For the governance component of the R-Factor score, SSGA drew from 16 national corporate governance codes, which it said were “transparent and supported by a large number of investors”. For the remaining countries the International Corporate Governance Network code is used.More concretely, this aspect of the score construction involves SSGA’s stewardship team taking metrics supplied by another data provider, ISS-Governance, and mapping those seen as relevant in a given market to the principles articulated in the corresponding governance code. Kumar told IPE that investors had not been giving enough guidance to companies about the information they wanted and that “the whole purpose [of R-Factor] is to bring transparency to the scoring process, especially around the financial materiality of ESG”.last_img read more

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Cost of V8 star’s marriage split widens

first_imgThe Courtneys’ dream home has been sold at a $295,000 vendor discount. The Courtneys have been a tight unit for many seasons. Picture: Jerad Williams. Queenslanders ‘most well off in nation’ File picture of James Courtney at home during a recovery phase in his career with his children. Picture: Adam Head. New look at Hemsworth’s mega mansion James Courtney pictured ahead of the Newcastle 500 at the end of November. Picture: Tim Hunter.The cost of V8 superstar James Courtney’s marriage breakdown has widened, with he and estranged wife Carys giving up on one of their houses at a $295,000 discount.Unsurprisingly, the luxury home is a dream property “for the car enthusiast” with “two separate garages with room for four cars, two golf buggies or jet ski and enough off-street parking for at least another 4 cars”.The Courtneys split very publicly mid last year, with Carys making an announcement on Instagram.Since then, James has been active on social media, putting up the tree as a sole parent with the kids, and also posting from a boat during the Christmas holidays with family. FOLLOW SOPHIE FOSTER ON FACEBOOK Amy Shark sinks millions into home town The couple had wanted $2.795 million for their four bedroom, four bathroom Hope Island dream home when it was listed on July 24 last year — just months after the split.They were willing to negotiate come December with a price finally being settled on January 15 for $2.5 million.More from newsParks and wildlife the new lust-haves post coronavirus14 hours agoNoosa’s best beachfront penthouse is about to hit the market14 hours agoOne of the couple’s investment properties — with Defence Housing Australia — has also come on the market in Greater Brisbane.The Hope Island home went through a major renovation by Bayden Goddard — the sought after re-designers of up-market properties along the Glitter Strip. The kitchen is a chef’s dream with a massive walk-in pantry.The home also has a kitchen fit for a master chef with marble island bench, European appliances, Vintec wine fridge and a massive butler’s pantry.The property is in Sanctuary Cove “recognised worldwide as Australia’s finest residential gated estate”, according to the listing. Carys pictured at their Hope Island home after having Stage 1 melanoma and basal cell carcinomas skin cancers removed in 2016. Picture Mike Batterham. MORE: NRL star cuts Gold Coast ties Post on Carys Courtney’s Instagram page announcing her split with husband V8 Supercar driver James Courtney. Picture: @caryscourtney/Instagram. File picture of the Courtneys at the 2015 Clipsal 500 Day 4. Picture: Campbell Brodie.The renovation was described as being “of undeniable quality” which had “completely transformed this breathtaking home to a spectacular scale, exhibiting complete luxury in every aspect”.“Manicured grounds, travertine terraces, sun-drenched tiled pool and spa, cabana with double BBQ and full bathroom — this is alfresco living at it’s finest for family and friends to congregate.” James and Carys Courtney fully loved-up leading in to the start of the 2014 motor racing season. Picture: Adam Armstrong. The home has two separate garages and tonnes of parking. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:58Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:58 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD432p432p216p216p180p180pAutoA, 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 Rate1xFullscreenHow much do I need to retire?00:58last_img read more

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