“Nonetheless,” she added, “it is important that, as a government, we formulate a response on this critical issue where we have seen other countries we would regard as markers for Ireland successfully introduce initiatives to address the question of supplementary pensions.”The minister strongly indicated that the launch of auto-enrolment would see a reduction of current tax burdens to balance out the increased cost of second-pillar pension saving, saying there was a possibility for the “recasting” of the current universal social charge structure to support both the state pension and private provisions.However, Burton said it was important to bring the Social Insurance Fund – used to cover the state’s social protection spending and currently running a deficit – back into a surplus before such steps could be considered.“What we do need to have is an adequacy of funding for the state retirement pension, and, currently, there is an actuarial deficit of over a billion per annum in the state pension Social Insurance Fund,” she said. “We need to address that over a period of time.”She appealed to social partners to work with the government on the eventual design of the new system.“It would need both government and industry and employers and unions to come together to agree on the best possible framework with the highest degree of security, obviously keeping costs as low as possible but also having the security as a paramount issue given our recent financial history in this country,” she said.Security and cost was an issue repeatedly touched on by the minister, who said an auto-enrolment system would need to offer “secure identification of whatever savings someone put in to a supplementary pension”.She also noted that the Department of Social Protection would soon be looking to appoint members of the new Pensions Council, the consumer-focused body tasked with advising the government on pensions policy.Burton reiterated that the Council’s first task would be to look into the level of pension charges and advise if she needed to take further action to lower costs.“This is an area that obviously has the highest priority,” she told delegates. The introduction of auto-enrolment in Ireland will likely be postponed until the country’s economy recovers and its Social Insurance Fund is no longer running a deficit, the minister for Social Protection has said.Discussing the potential for a mandatory or quasi-mandatory second-pillar pension system, Joan Burton said she believed auto-enrolment would be a more viable option for the country, despite a recent OECD report on the Irish pension system branding auto-enrolment a more costly and second-rate policy.Speaking at the Irish Association of Pension Funds annual benefits conference in Dublin this week, the Labour TD admitted that any such reform would need to go hand in hand with an emphasis on security of individual savings, as the recent use of assets from the National Pensions Reserve Fund to prop up the country’s ailing banking sector would “probably loom quite large in people’s minds”.Burton also said the economic circumstances to make an auto-enrolment system viable were probably “still a little bit of time away”.
PGGM, the €178bn Dutch asset manager, has announced an extensive reorganisation to increase its “battle-readiness” and drive down the cost of its services.As part of the revamp, which aims to cut structural costs by €50m over the next three years, at least 200 of its 1,275 full-time employees are to be made redundant, it said.PGGM said the reorganisation would affect all parts of the organisation and warned that it would not rule out forced redundancies.Chief executive Else Bos said: “The Dutch pensions market is becoming increasingly dynamic, and PGGM needs the agility to anticipate these developments.” She said PGGM needed to reduce the costs of its products, as price had become increasingly important to its clients.She said the reorganisation must also create space for new services, although a spokesman at PGGM declined to elaborate on exactly what these plans might entail.PGGM is asset manager and pensions provider for seven pension funds, including the €140bn healthcare scheme PFZW and the €8.5bn pension fund for general practitioners (SPH), with more than 2.5m participants in total.The provider also offers its institutional clients pensions administration and board support.Two years ago, APG, the €390bn asset manager of the large civil service scheme ABP, announced a similar reorganisation, leading to 800 job losses among its then 4,155 staff, to be spread out over a four-year period.
Denmark’s statutory pension fund ATP suffered a big loss on investments in the fourth quarter of last year, which cut the return it made over the rest of the year by nearly 40%, dragging the full-year return down to DKK5.36bn (€720m), or 6.5%.The year before, 2013, the fund reported a 17.9% return.The 2014 return – before tax on pension savings returns – was 38.6% lower than the DKK8.73bn return posted for the first nine months of the year alone.In its annual results statement, ATP said its investment portfolio made a DKK3.38bn loss in the fourth quarter. Carsten Stendevad, chief executive, said: “Investment activities generated a return of DKK6.1bn – before both expenses and tax – with most of ATP’s investments performing well.“Exceptions were oil investments and the long-term hedging strategy against rising inflation, which produced negative returns.”Inflation hedging activities alone – part of the pension fund’s inflation risk class within its investment portfolio – lost ATP DKK5.9bn over the year.ATP said a sudden rise in inflation, which would water down the buying power of pensions, was a significant risk for the scheme’s pensioners.“Therefore, ATP has bought protection against rising inflation since 2009,” it said.This insurance strategy consisted of inflation caps and swaptions, it said.“The big fall in inflation and bond yields with a long time remaining to maturity affected values very negatively,” it said.However, within the inflation risk class, DKK1.7bn and DKK1.9bn returns on property and infrastructure, respectively, helped reduce the loss for that category to DKK2.8bn.The commodities risk class ended the year with a loss of DKK2.0bn, with the portfolio consisting entirely of oil bonds and oil-related financial instruments.Over the year, the oil price fell to around $55 a barrel from $95.Equities generated DKK8.5bn for the pension fund during the year, and the credit risk class produced a return of DKK776m.ATP’s investment portfolio is only around 20% of its total assets, with the vast majority invested in the hedging portfolio, designed to underpin the yield guarantees it gives its members.This hedging portfolio – consisting mainly of bonds and related instruments – ballooned in 2014 as market interest rates dwindled and in some cases went below zero.Including the hedging portfolio, ATP made a total return over the year of DKK138.3bn, or 23.3%, on total assets, which grew to DKK823.6bn by the end of 2014, from DKK677.5bn.Looking ahead to the full 2015 year, ATP said it was applying a new long-term target.This has been set at 7% of bonus potential at the beginning of the year, it said, equivalent to just over 9% before tax and expenses.
The Bonus Pensionskasse, with €472m in assets under management (AUM), has now increased its AUM by 120% with the deal.The larger provident fund, managing €500m in mandatory severance pay assets, will grow by 50%.Bonus is the only provider in the second-pillar pension system where a provident fund and one of the portfolios in its Pensionskasse have been SRI certified by the Austrian Society for the Environment and Technology (ÖGUT).Meanwhile, the Austrian pension fund association (FVPK) reported an average return for the first half of 2015 of 4.25%.The VV-PK purchase brings the total number of Austrian pension funds down to 13, with just over €20bn in AUM.The number of provident funds decreased to nine, with more than €6bn in assets. Pension provider Bonus, a division of the Zurich and Generali insurance group, has agreed to acquire the pension fund (VV-PK) and provident fund (VV-VK) of the Victoria-Volksbanken Group.The Volksbanken group had put its pension fund, with around €660m in assets, and its provident fund, managing €224m in severance pay funds, up for sale.How many domestic or foreign providers bid for the two funds, co-owned by the German Ergo insurance group, remains unclear.As reported by IPE, the provident fund provider fair-finance showed public interest in purchasing both the VV-VK and the VV-PK to gain a foothold in the market.
Titcomb defended the regulator’s current approach to trustee education, which sets out a minimum level of knowledge required from all trustees, and distanced herself from the notion of greater training.“We would run the risk of struggling even more to attract good lay trustees if we were to introduce mandatory qualifications for everybody,” she said.The new chief executive, however, did highlight TPR surveys that found schemes chaired by professional trustees were better administered and asked whether that warranted closer inspection.Galvin, for his part, likened the tasks facing trustees to decisions made by the Bank of England’s monetary policy committee and said they faced the challenge of dealing with “complex” financial engineering and capital structure problems.“That’s a meaty role, isn’t it?” he asked. ”The qualifications for that role must be enormous. The bar must be set very high, [and] that role must have a very high status.“Well, I guess in some places it does, but in a lot of places it’s well-meaning amateurs, time-conflicted, without adequate training, put together with some utterly conflicted and time-limited executives, sprinkled with a few professionals and a regulator looking over the shoulder.”He said the industry dealt with the problem by outsourcing responsibility to the consultancy industry.“If we want DB done properly,” he said, “it should be about putting responsibility into the hands of people who can make these judgements and run these institutions as they should be run, and that’s what members are due.”The Irish regulator’s suggestion that greater training would be required was not warmly received by the Irish Association of Pension Funds, which warned that it risked “group think” among trustees. The Dutch regulator, meanwhile, has imposed a number of rigorous checks for members of pensions boards that the industry previously warned could require the sector to draw on foreign experts to meet requirements. The former head of the UK’s pensions regulator has clashed with his successor over the need for professional trustees on pensions boards.Bill Galvin, now chief executive of the Universities Superannuation Scheme (USS), spoke of the need for greater professionalism on trustee boards when asked which single change he would force through to improve outcomes for defined benefit (DB) schemes.Speaking at the National Association of Pension Funds annual conference, Galvin said the result of the industry being honest about the level of knowledge required from trustees would be “revolutionary” and questioned why “well-meaning amateurs” were still members of boards.His comments come the day after Lesley Titcomb, Galvin’s successor as chief executive of the Pensions Regulator (TPR), questioned whether the UK should follow the Netherlands and Ireland in setting or considering mandatory training and qualification standards.
Gabriel Bernardino, EIOPA’s chairman, later noted he had long been clear that a new funding model for the ESAs was required, and hoped it would be in place as soon as possible.“The situation right now, it’s really hurting from the perspective of the job that we need to do, and the kind of inflexible approach to budget we have is definitely not in line with the expectations,” he told journalists in a press conference on the sidelines of the EIOPA conference.Bernardino also reiterated his support for the continuation of the occupational pensions stakeholder group (OPSG), which the letter from Juncker in September initially suggested would be merged with its insurance counterpart.“To merge them, I think, would dilute discussions that are very important for the different sectors,” Bernardino said, “so I want to have, and continue, with the approach we have.”Guersent repeatedly praised the work undertaken by EIOPA and said the body’s importance would only grow in future.He said it was important EIOPA and the two other ESAs became “more than a gathering of national supervisors”.“I think this is the key to their success,” he said. Guersent also defended the Commission’s decision to push ahead with the pan-European personal pensions (PEPP) model developed by EIOPA, recently criticised by the Dutch government, and said he was so impressed with the idea of a single, Europe-wide system for the third pillar that a green paper on retail saving due before the end of 2015 would include details of a 29th regime for life insurance products.“Despite the known barriers, we must work to create a genuine single market for insurance and pensions, with more cross-border sales and better portability of products,” he added.Guersent said he looked forward to EIOPA’s final advice on PEPPs by early next year, and that personal pensions could play an important role in a number of member states that had so far not developed an occupational pension system.“I do not share the scepticism of some stakeholders about 29th regimes,” he added, citing the UCITS fund model as an example of a successful European model.“We need to plant a seed, and we need to allow it to grow.” A new “robust and secure” funding model for the European Insurance and Occupational Pensions Authority (EIOPA) will be unveiled next year, the European Commission has pledged.Without offering further details of the new funding arrangement, Olivier Guersent, the most senior civil servant within the directorate general Financial Stability, Financial Services and Capital Markets Union, told the EIOPA conference in Frankfurt on Thursday that a White Paper outlining the new model would be published in 2016.Reform of the funding model for the European Supervisory Authorities (ESA) has been on the agenda of financial stability commissioner Jonathan Hill since taking office late last year.When president Jean-Claude Juncker confirmed Hill as his candidate for the finance portfolio, he said it would fall to the new commissioner to “eliminate” any funding from the EU and national budgets to the ESAs, moving towards an industry-wide levy.
A set of 30 criteria that would apply on the funds are currently being discussed, but Lundbergh said this would not be enough to deal with the underlying problems.“My recommendation is to have someone in charge of the fund platform, to ensure there is quality and good diversity there – because there should be a sheriff in town,” he said. This sheriff should be an organisation given the assignment by the Pension Group, he said. Stefan LundberghThe premium pension is a retail fund platform for Swedish consumers, but neither the Swedish Pensions Agency (Pensionsmyndigheten) nor AP7, the provider of the default investment option in the PPM, has been given the mandate to act as principal of the fund platform. Legislators must define a clear goal for the premium pension system, Lundbergh said in his report, adding that the decision should be taken at the political level because the premium pension was part of social security system.“First of all, they must create a clear goal, because then you know what you’re trying to build and only then you can evaluate the results,” he said.Because the current goals are “fuzzy”, the default investment option in the system is forced to define its own goals, Lundbergh added. Politicians should seek to set the default fund’s goals to help guide the offerings on the PPM platform.Even though deciding the actual goals was outside the scope of the review, Lundbergh listed a few target criteria for making that decision. These included:The premium pension is a compulsory social insurance for which the state has an overall responsibility;The investment strategy should prioritise a lifelong retirement income over maximising a pension pot; andThe realised return should, over time, be higher than wage inflation.The goals should be assessable so that the performance of the system can be properly evaluated in the future, Lundbergh said.“Given that it is part of the social security system, it is reasonable to assume that the risk-return tradeoff of the default in the premium pension should not be more aggressive than in the occupational pension,” he said.Lundbergh also urged the Pensions Group to bear in mind the lessons of behavioural science in their deliberations on PPM reform, in particular the fact that people have proved to be less interested in making their own choices than was originally anticipated when the system came into being in the 1990s. “The construction of the premium pension required active and informed savers who would select the good funds and abandon the bad funds,” he said in the report. If this had been the case, he argued, market forces would have limited the space for sub-par funds and rogue providers. “The reality has been different and it has turned out that more information and transparency does not help – it is impossible to inform those who are uninterested.”“The key issue is that in order to have a successful premium pension system, it’s important that choice architecture is based on fact and what people actually do,” he concluded. Sweden’s premium pension system (PPM) needs to have an agency to act as a “sheriff” to prevent the fraud that has dogged the system and assure the quality of funds on the platform, says the architect of the latest government-commissioned review.Cardano director Stefan Lundbergh officially presented his report to the Swedish government’s cross-party Pension Group at the end of August, mapping out options for reforming the PPM. The PPM is the funded part of the first pillar state pension that allows individuals to choose their own investment provider.The fund platform currently has more than 850 funds, and Lundbergh told IPE that virtually any provider was allowed to offer funds to the public as long as they are UCITS-compliant.Lundbergh said: “Right now, there is no one looking at the investments offered on the fund platform and doing some kind of quality assurance.”
Universal-Investment has succeeded in significantly increasing its assets under management, as its investment strategy team recently recorded cash inflows from a large institutional investor in the DACH region of €5bn.By its own account, this is the largest overlay management mandate ever to be won by Universal-Investment.The goal of the investor is to use the overlay strategy to hedge risks and to achieve added value through tactical overlays, the manager disclosed.“The customer has already launched a €1.7bn overlay mandate with Universal-Investment since autumn 2017,” said Peter Flöck, head of portfolio management at Universal-Investment. After two years of positive outcomes, the asset owner is now increasing the volume by another €5bn, “which makes us extremely happy and confirms the path we have taken so far and the work of my colleagues”, Flöck added.The firm’s overlay team is now responsible for a fund volume of €32bn, while the overall portfolio management team of Universal-Investment now manages approximately €41 billion in mandates for institutional investors and external master KVGs.
This area, and the dining room, opens on to a balcony with river views.The kitchen has an ASKO oven, five-burner gas stove and dishwasher, shaker cabinets, Qasair rangehood and plenty of storage space. “I love it, I can work down there, and it opens up onto the patio,” she said. “It’s lovely and cool down there in the summer. “We also spend a lot of time in the sunroom downstairs which also opens out onto a balcony and, in the winter, we spend time in the courtyard.”The fully renovated Mediterranean-style double-storey home has stately columns, high ceilings, multiple indoor/outdoor living spaces, fully landscaped gardens and stunning river views. A main bathroom has an island bathtub, waterfall shower and floor to ceiling tiles. Crimsafe security screens have been installed through the property and there is an alarm system, intercom and automated gate and garage door. 33 IVY ST INDOOROOPILLY“What attracted us to it was the tranquillity, it is just so peaceful here,” Mrs Dodd said. “And the sunset over the river is just beautiful.”The terraced property has a resort-style swimming pool and leads down to a private pontoon.Mrs Dodd said one of her favourite parts of the home was her studio downstairs. The property is on 1086sq m of land in a quiet pocket of the suburb. The main bedroom is on the lower level and has an ensuite and a walk-in wardrobe. There are two other bedrooms on this level as well as a large media room. The living areas have views of the river and Mrs Dodd said they could look out their bedroom window across the swimming pool and out to the river.“The house has such a homey feel and it is comfortable and modern and it has very high ceilings, which I also love,” she said. There are views from the entry of the home right through to the river.The entrance is via a courtyard and double timber doors that open on to a foyer that runs the length of the lower level. Off the foyer is a bedroom, office, a second living area, the kitchen, dining area and the main lounge room, which has an open fireplace with a traditional mantel. More from newsParks and wildlife the new lust-haves post coronavirus12 hours agoNoosa’s best beachfront penthouse is about to hit the market12 hours ago Bask in the sunsetWith absolute river frontage and uninterrupted views across the Brisbane River, Debbie and Terry Dodd quickly fell in love with their Indooroopilly home. The main bedroom also has a floor safe and the home is air-conditioned and has planation shutters throughout.
David and Louise Fellows are looking to sell their Bushland Beach home following the approval of the Adani mine. Picture: Evan MorganTheir daughter, Daisy Wolf, who is helping her parents with the sale, said they had been waiting for the right time and the announcement changed everything. Adani cleared the last hurdle last Thursday when the Queensland Environment Department approved the company’s groundwater management plan. Waterfront development hits the market David and Louise Fellows are looking to sell their Bushland Beach home following the approval of the Adani mine. Picture: Evan MorganTOWNSVILLE property prices are expected to soar with homeowners ready to sell and investors predicted to pounce in the wake of Adani receiving the green light for its Carmichael Mine.Bushland Beach homeowners David and Louise Fellows will now put their house on the market earlier than planned after the Indian mining giant was finaly approved last week after nearly a decade.MORE NEWS Tradie saves his way to four investment properties by 22 MORE IN REAL ESTATE High flyer beach pad at Pallarenda Supplied image of Brenden Dousling, Allan Skillings, Ted Pham, Greg Bennett, Ally Foley and Mick Heap at the Adani Carmichael mine site where construction has begun.“We had a real estate agent out to the house on Wednesday,” Ms Wolf said. “Now that Adani has been approved I think prices will be best in a year’s time.“We probably would have put it on the market in a few years, but now we have decided we will do it sooner because we think we will get the most for it then.”REIQ regional director Damien Keyes said he expected property prices would increase with the demand at the beginning of next year, on the back of the building ramping up at the Galilee Basin mine site. “The approval of Adani will make our region in particular of importance to out-of-town investors.”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 2020 REIQ regional director Damien Keyes. Picture: Evan Morgan“I think that towards the back end 2019 the volume of sales will start to lift and in the New Year we will start to see the median property price in Townsville start to rise,” Mr Keyes said. “Conditions are pretty perfect for investment in Townville at the moment.”Propertology’s head of research Simon Pressley said demand for housing in the region would also come from infrastructure projects like the $30 million port project. In this year’s budget the State Government announced it would be spending more than $930.7 million on regional infrastructure, which will create more than 3200 jobs.Combined with a pipeline of other projects in the works, the next few years should be particularly positive for North Queensland.“Projects like the new military training facility, the waterfront development, the port masterplan, Haughton pipeline, Kidston renewable energy project, and a few mining projects including Adani are good for the region,” Mr Pressley said. Propertology’s head of research Simon Pressley.“Propertyology expects further job creation to help boost local confidence along with Townsville’s demand for housing.“Rental vacancy rates are tight, interest rates are the lowest seen for generations, the Federal Government’s new first homeowner scheme is a ripper, and yields are strong for investors.” Ray White agent Julie Mahoney, said buyers were quick to put their money where their mouth was, which is a good sign for the future. “Five out of five properties sold under the hammer on Tuesday night,” Ms Mahoney said. “I’ve seen mostly owner-occupiers in the market and people buying for re-sale and subdivision purposes in the future.“Townsville is fast approaching a ‘normal’ market and the announcement of massive projects and the Adani approval has signalled confidence and the promise of numerous job opportunities.”REMAX agent Michelle Hyde also said she has seen an increase in buyers on the market since the federal election. “I think the local economy is on the up again.” Ms Hyde said.“Recently I’ve been getting multiple offers on the properties I’m marketing and that’s something we haven’t seen for quite some time in Townsville.”