Pension fund for Dutch coal miners forced to ‘consider own future’

Month: September 2020

Pension fund for Dutch coal miners forced to ‘consider own future’

first_imgThe Algemeen Mijnwerkersfonds said it was therefore looking into the options of carrying on independently or starting a co-operation with other pension funds for miners.At the end of 2012, the AMF managed pension assets for 26,733 pensioners, 1,793 deferred members and a single active participant.The scheme reported returns on investments of 9.4% over 2012, and a funding ratio of 111.8% at January-end.The BMF, its sister scheme, managed €155m for 2,283 pensioners and 47 deferred members in 2012.Recently, it announced a second rights cut of 0.6% in April, following a 7% discount last year.Last January, the miners scheme had a coverage ratio of 105%.The BMF, which also reported a 9.4% result over 2012, said it had to make a provision of 13% of its total assets for increased longevity so far. The Algemeen Mijnwerkersfonds (AMF), the €885m closed pension fund for coal miners in the Netherlands, has said it is “considering alternatives” for the management of its participants’ pensions.Together with its sister scheme BFM, and advised by Towers Watson, it said it was now investigating its options for placing its pensions with an insurer.The AMF’s board claimed that a review of the pension fund’s future would be “necessary”, as its population is to halve over the next decade, resulting in “increasingly expensive” management.It said it was also becoming increasingly difficult to find qualified board candidates, and that rising life expectancy required ever-rising returns on investment to meet promised pensions.last_img read more

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PGGM buys into Palamon-managed private equity funds

first_imgDutch pension manager PGGM has bought stakes in two private equity funds run by Palamon Capital Partners, after its previous backers sought to sell their holdings.The sale of the stakes to a consortium consisting the €186bn PGGM, the private equity arm of Goldman Sachs, Adams Street Partners, Morgan Stanley Alternative Investment Partners and Rothschild Merchant Banking was completed after an auction overseen by Credit Suisse Private Funds Group.After buying into Palamon I and Palamon II, established in 1999 and 2006, PGGM now owns stakes in UK financial advisor Towry, Italian consumer finance company Sigla and Spanish residential care provider SARquavita.The funds also own a Nordic energy broker, Eneas, and a German-based medical company and UK dentistry chain IDH, which in May listed on the London Stock Exchange. The agreement, which came about after limited partners in both funds opted to sell their holdings, has also seen the consortium commit undisclosed additional capital to a Palamon fund launched in 2013.Louis Elson, managing director at Palamon, praised the “easy-to-access” process that allowed the existing limited partners to sell their stakes.“Recognition should be given to Credit Suisse, who ran a process that will no doubt serve as an industry benchmark for building further alignment and fluidity into the secondary market,” he added.The deal will continue to grow PGGM’s private equity holdings, for which the manager has a target allocation of 5%.Last autumn, PGGM bought a 20% stake in Nordian Capital Partners, formerly the private equity arm of Rabobank, on behalf of Dutch healthcare sector scheme PFZW.At the time, PGGM also committed a further €300m to a new Nordian fund, growing its private equity holdings to €8bn.last_img read more

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Pension funds in Unipension alliance see costs surge ahead of split

first_imgMP Pension’s business model was to build up a large capital buffer, enabling it to put a long-term investment strategy in place in spite of turbulence on the financial markets.Its solvency coverage increased to 1.26% at the end of 2015 from 1.08% a year before, according to the annual data.Meanwhile, AP’s solvency coverage grew to 1.4% from 1.2%, and PJD’s coverage rose to 1.61% from 1.35%.Each of the three pension funds, however, saw its total assets fall during the year and costs increase.In December, Unipension, set up by the three professional pension funds to manage their assets and administration collectively, announced that AP and PJD decided to quit the alliance and move their funds to Sampension.Commenting on the upcoming move, AP chairman Mette Carsted said in the annual report: “In Sampension, we can look forward to becoming part of an even larger joint company, with the economies of scale that will yield.”In 2015, MP Pension saw total assets fall to DKK112bn from DKK117bn.It is set to continue alone at Unipension from 1 January 2017, when AP and PJD will leave.AP reported that total assets fell to DKK9.2bn at the end of 2015 from DKK9.6bn, while PJD said total assets fell to DKK14.1bn from DKK14.7bn.Costs at MP Pension rose 1.7% in 2015 to DKK529 per member, but the two funds leaving Unipension saw much steeper rises in costs, with AP’s costs climbing 43% to DKK1,263 per member and PJD’s costs up 32% to DKK1,319.All three pension funds put the rise in costs down to extraordinary costs as a result of the termination of the cooperation at Unipension. The three Danish professional pension funds run by pensions manager Unipension saw costs surge by up to 43% last year because of their upcoming split as the smaller two prepare to shift their operations to rival provider Sampension.In their 2015 annual reports, the Architects’ Pension Fund (AP), the Pension Fund for Agricultural Academics and Veterinary Surgeons (PJD) and the Danish Pension Fund for MAs, MScs and PhDs (MP Pension) said pre-tax returns for the year fell to 5.1%, 4.7% and 4.4%, respectively, from 10.2%, 10.5% and 10.2% the year before.But their active investment management generated returns above the reference indices, the pension funds said.Egon Kristensen, chairman at MP Pension – largest of the three schemes – said:  “The pension fund produced a competitive return for members once more in 2015.”last_img read more

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Rights cuts loom large at Dutch schemes despite strong Q1 returns

first_imgAs a result, ABP’s coverage ratio fell by almost 7 percentage points to 90.4%. If the ratio falls below the 90% mark, ABP will be forced to cut pension rights. Corien Wortmann-Kool, the scheme’s chair, said the possibility of a cut was still “very real” and that indexation was “very unlikely for the next five years”.ABP attributed its quarterly performance in particular to fixed income, which returned 2.5%, with long-term government bonds and inflation-linked bonds returning 9% and 2%, respectively.Its interest, currency and inflation hedges returned 2.9% in total.The civil service scheme, however, made a 3.4% loss on equity, with developed-market holdings falling by 4.7%.Its investments in commodities and hedge funds also lost 5.9% and 4.6%, respectively, while property and infrastructure returned 0.1% and 0.6%, respectively.PFZW, the €172bn scheme for the healthcare sector, reported a Q1 return of 4.4% and a drop in funding of 6.2 percentage points to 88.9%.It produced positive returns on government bonds (6.9%) and inflation-linked bonds (2.5%), and returned 4.3% in total from its interest and currency hedges.Local-currency emerging market debt and mortgages returned 5.3% and 2.9%, respectively.It lost 2% on securities, however, with equity (-2.9%), private equity (-0.4%), infrastructure (-2.3%) and real estate (-0.6%) all producing negative returns.It also incurred a 3% loss on commodities.The €42bn metal scheme PME produced a 4.6% Q1 return, citing an 11% return for its 49% matching portfolio.Because liabilities increased by 10 percentage points over the period, however, its funding ratio fell to 90.8% – just short of the critical level of 90%.PME director Eric Uijen said: “We are preparing our participants for a possible rights discount next year.”The €63bn metal scheme PMT attributed its 5.5% Q1 return chiefly to the 13.1% return of its 49% liabilities portfolio of predominantly fixed income.Because liabilities increased twice as fast as its return, however, PMT closed the last quarter with a coverage ratio of 91.8%.BpfBouw, the €51bn pension fund for the building sector, saw a quarterly return of €3bn wiped out by a €5bn increase in liabilities.As of the end of March, funding at the industry-wide scheme stood at 103.9%, following a drop of 5 percentage points in the first quarter.Chairman Jan Ruis warned that indexation would be “off the cards in the coming years”.In the Netherlands, if at year-end a pension fund’s coverage ratio falls below 90%, it must reduce pension rights straightaway.Under the rules of the new financial assessment framework (nFTK), however, schemes may smooth out cuts over a 10-year period. Four of the five largest pension funds in the Netherlands are still facing rights discounts next year, as the impact of falling interest rates, the criterion for discounting liabilities, by far outstripped first-quarter returns.Although interest rates and equity markets recovered slightly in March, funding ratios have fallen by up to 7 percentage points on balance.ABP, the €359bn pension fund for Dutch civil servants, increased assets by €8bn after reporting a Q1 return of 2.2%.The scheme’s liabilities, however, increased by more than €36bn over the period.last_img read more

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UK roundup: Hymans Robertson, British Steel, Alcatel-Lucent, PIC

first_imgThe UK’s aggregate defined benefit (DB) deficit could be overstated by as much as £25bn (€29.1bn) due to inaccurate longevity data, according to Hymans Robertson.The consultancy’s longevity specialist arm, Club Vita, likened the inaccuracy to continuing to pay benefits for up to four months after the recipient had died.Douglas Anderson, founder of Club Vita, warned trustees and sponsors could be taking “an unnecessarily prudent approach” to longevity assumptions.“It could be distorting important decisions on the future strategy of their schemes,” Anderson said. Using data such as an employee’s final salary and their postcode could provide a more accurate idea of their life expectancies, Anderson added.“Under the traditional approach, you don’t know whether a typical £5,000 annual pension relates to a long-serving, low-salary person or a short-service, high-salary person – two people would have very different life expectancies,” he said.Club Vita claimed its data has helped reduce its clients’ liabilities by 1% on average.“Naturally, the ultimate cost of a pension scheme will be determined by how long its members actually live,” Anderson said. “But assumptions made today really do matter for such long duration commitments. The confidence that trustees gain from more insightful longevity assumptions does change behaviours, affecting members’ benefits, their security, and businesses’ ability to invest.”Elsewhere, the trustees of the British Steel Pension Scheme (BSPS) rejected a restructuring plan proposed last year by a leading UK financier to keep the scheme out of the Pension Protection Fund (PPF).According to an update from the trustees, Edi Truell last year presented them with a plan to alter the risk exposure of BSPS’ portfolio and negotiate government-backed hedges against inflation and longevity risk.Truell is a former chairman of the London Pension Fund Authority and a founder of Pension Insurance Corporation.Under the proposals, Tata Steel – the scheme’s current sponsor – would have continued to pay contributions, despite the company’s desire to sever its ties to BSPS.The trustees described the plan as “unsolicited proposals”, and rejected it as it would “would expose members to unacceptable risk”.“Mr Truell’s proposals were dependent on co-operation and commitments from government and Tata Steel, corporate and financial transactions with third parties, and approval by the Pensions Regulator,” BSPS said. “Mr Truell was unable to demonstrate that there was any reasonable prospect of these things happening.”According to newspaper reports, Truell’s foundation and Disruptive Capital Finance, a venture capital firm he runs, would have taken responsibility for managing the £15bn scheme, had it been approved. This would have involved the institutions taking a share of outperformance, according to BSPS.Truell was unavailable for comment when approached by IPE.BSPS’ future was thrown into doubt last year when Tata Steel announced its intention to sell its UK business. In December it reached a deal with unions to maintain and invest in its plants, but the agreement is reliant on the company’s ability to cut ties to the pension scheme.The trustees are currently negotiating with the Pensions Regulator about how this may happen. While the scheme could go into the PPF – it would be by far the largest fund to do so – the trustees maintain that the scheme is well funded and can be self-sufficient.Tata Steel is due to make its final two deficit recovery payments of £60m and £65m in March 2017 and March 2018, respectively. These are unaffected by the ongoing consultation regarding closure of the scheme to future accruals.Earlier last year, BSPS reported a shortfall of £1.5bn, but this was almost completely offset by investment gains over the summer to just £50m on a technical provisions basis as of mid-October.Meanwhile, the Alcatel-Lucent Pension Scheme has concluded its second buy-in in just over a year, transferring £100m of pensioner liabilities to Pension Insurance Corporation (PIC).It follows a £300m deal announced in January 2016, which was backed by Aviva.Uzma Nazir, head of origination structuring at PIC, said: “As we have seen, trustees, such as those for the Alcatel-Lucent Pension Scheme, who have moved to lower risk assets over a number of years are now able to complete buy-ins to enhance security. After a very busy few months in the market, we expect this clear trend to continue for the foreseeable future. We are proud to have been able to help the trustees to efficiently de-risk.”last_img read more

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LGIM turns up heat on company boards with voting strategy

first_img“Consistent and ongoing dialogue with companies is fundamental to our active ownership approach, and we engage with companies throughout the year to effectively influence and change behaviours,” he said.LGIM voted against 118 pay resolutions at UK companies in 2016, it said. In addition, it has backed the Hampton-Alexander Review, a government-endorsed project to encourage listed companies to have at least a third of leadership roles occupied by women by the end of 2020.On ESG, another core area of activity for LGIM, the group said it had raised sustainability-related topics at 47% of its 500 company meetings during the year.LGIM has vowed to vote against board chairs of companies that do not “embrace the transition to a low carbon economy”. In its Future Funds range – which includes the equity default option for HSBC’s defined contribution scheme – LGIM said it would divest from companies that did not adopt low carbon strategies.Sadan added that “the combined approach of ranking, engaging, voting, and divesting sends a powerful message that investors are serious about tackling this issue”. Legal & General Investment Management (LGIM) stepped up its activist role last year by opposing resolutions at more than half of the companies in the FTSE World indexes.LGIM, the world’s ninth-biggest asset manager according to IPE data, voted against at least one resolution at 56% of company shareholder meetings during 2016, according to its latest corporate governance report. In 2015, this figure was 52%.The group’s equity funds are predominantly passive, but LGIM said it did not abstain from any vote at UK listed companies. For its UK holdings, LGIM voted against resolutions at 23% of companies, compared with 18% in 2015.Sacha Sadan, director of corporate governance at LGIM, said the group had strengthened its voting policies on remuneration, board composition, and diversity during last year.last_img read more

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Invesco to buy ETF specialist Source

first_imgThe parties involved did not reveal the price of the transaction.Martin Flanagan, president and CEO of Invesco, said the acquisition would “significantly enhance our ability to deliver meaningful solutions to institutional and retail clients in Europe and around the world”.“The addition of Source will help us meet increasing demands from clients who want to work with investment organisations that can deliver across the full range of investment capabilities and provide the outcomes they seek,” he added.Mike Paul, executive chairman of Source, said the two firms were “extremely complementary” and claimed that “the combined business will be a true leader in the ETF market across Europe”. American asset management giant Invesco has agreed to buy European exchange-traded fund (ETF) provider Source.The deal – due to close in the third quarter of this year – would see Invesco take on an additional $25bn (€23bn) in assets under management: $18bn managed directly by Source, and $7bn in ETFs built by Source and managed by third parties such as PIMCO.Invesco already runs $110bn through its PowerShares ETF business. These products are primarily listed in the US, while Source’s ETFs are based in Europe. PowerShares is the fourth-biggest ETF provider in the world, after BlackRock’s iShares, Vanguard, and State Street Global Advisors.Source is currently majority-owned by private equity firm Warburg Pincus, which bought its stake in 2014 from Bank of America Merrill Lynch, Goldman Sachs, JP Morgan, Morgan Stanley, and Nomura. The five banks remained minority stakeholders.last_img read more

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Auction preview: Gold Coast top three homes going under the hammer

first_img9 Pensacola Court, Broadbeach Waters.Agent Marcel Hollett of Harcourts Coastal Broadbeach said he had interest in the home from as far as Sydney.“If buyers are looking for a good quality value in a quality area, then I would say come a look at this property,” he said.“This particular property offers really good buying.” 6 Torrevella Vista, Coombabah.The commercial quality build of 6 Torrevella Vista includes full perimeter external concrete tilt panel walls, a suspended concrete slab and concrete staircase.At 2pm a luxury waterfront property at Broadbeach Waters will go under the hammer.The five-bedroom modern home is just off the main river and offers skyline views to Surfers Paradise and Broadbeach. 76 Sunshine Pde, Miami.More from news02:37International architect Desmond Brooks selling luxury beach villa17 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days agoHe said Miami was continuing to gain strong interest from buyers.“Burleigh Heads, Burleigh Waters and Mermaid Beach are getting quite expensive and a lot of people are seeing value for money in Miami which is driving that interest,” he said.Buyers wanting to move into a larger home are keen on a five-bedroom residence at Coombabah which is going to auction on Saturday at 11am. 76 Sunshine Pde, Miami.“There has been a lot of interest and it’s only been on the market just over three weeks,” agent Guy Powell of Ray White Mermaid Beach said.“It’s been attracting some local buyers who want to step up from units and apartments.“There has also been interest from Sydney and Melbourne.” 6 Torrevella Vista, Coombabah.“It’s a bit like a resort, with an L-shaped pool and plenty of funky features,” Ray White Sovereign Islands agent Sebastian Ross said.“It’s also walking distance to shops and restaurants, and a five-minute drive to the Broadwater and Harbour Town.” Harcourts Coastal managing director and auctioneer Dane Atherton in action earlier this year. Picture: Jerad WilliamsTHE weather may have cooled but there are a several hot properties going under the hammer this weekend.On Saturday, a three-bedder at Miami is set to go to auction at 10am.The property at 76 Sunshine Pde is in original condition and is bring marketed to buyers as an opportunity to “renovate, rebuild or redevelop”. 9 Pensacola Court, Broadbeach Waters.last_img read more

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More than a quarter of all Australian households are renting

first_imgMore than a quarter of all Australian households are rentingACCORDING to new analysis by the Australian Housing and Urban Research Institute, more than a quarter of all Australian households are renting.That’s about 2.1 million households.It said the private rental sector had grown by 38 per cent in the 10 years to 2016 and it predicts that level to increase.“This growth looks set to continue, largely due to a long-term decline in access to home ownership, particularly among younger and midlife age cohorts, because of high house prices and contraction of the social rental sector,” the research institute said.Real Estate Institute of Queensland Far north zone chairman Tom Quaid said the Cairns city area continued to stand out for its quick turnover in rental properties.More from newsCairns home ticks popular internet search terms2 days agoTen auction results from ‘active’ weekend in Cairns2 days ago“Rental vacancy rates remain tight, with the added pressure on supply seeing landlords able to increase their rents in many cases,” Mr Quaid said.“Landlords remain in the box seat for the time being, particularly around the CBD and tightly held city fringe pockets where supply has been the most affected.“The $300-$500 per week range would be the most popular.”As Mr Quaid has mentioned previously, there was not enough stock available in Cairns at present.“Cairns has seen very little new construction over the past decade, and combined with steady population growth and the growth of Airbnb in our tourist-driven market, rental stocks are stretched,” he said.last_img read more

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Cairns City, Gordonvale great for those renting close to trainline

first_img Edmonton (house) Cairns CBD (unit) Median value $417,007 Yearly growth 8.2%3-year growth 5.1%5-year growth 15.7%Median Rents $470Rental change (1 year) 12.6%Rental change (5 years) 22.1%Rental Yield 7.2% Median value $232,908Yearly growth -2.8% 3-year growth 4.0% 5-year growth 11.9% A historic steam train arriving in Cairns after making its way up the coast for Queensland Rail’s 150 year anniversary. The 1956 1079 steam locomotive and historic carriages arriving at Cairns station. Picture: Stewart McLeanHOMES in the handful of Far North suburbs lucky enough to be near a railway station may not fare the best in the capital growth stakes but in terms of rental returns, they are an investor’s dream.Cairns City units increased in value by 8.2 per cent over the year to July, making it the best performing railway suburb across the Cairns region, and the only to record an increase in 12-month growth, according to a recent CoreLogic reportRental yields in the CBD, Cairns North, Edmonton and Gordonvale were between 6.1 and 7.2 per cent, almost double that in Brisbane which currently sits at 4.4 per cent.Rents increased across the region over one year and five year period, except for in Gordonvale where the median rental price for houses was 2.1 per cent lower than one year ago.Since 2013, however, rents climbed 4.4 per cent in the town.While this may make railway suburbs more or less attractive for Far North buyers, Elite Real Estate Services Karl Latham said in all his years in real estate “it has never been a factor of people’s decision to buy a property”. “The reason is that there are no stations in suburbs. It has always baffled me as in my opinion it would certainly make sense to capitalise the rail line on the southern corridor with stations at White Rock, Bentley Park, Edmonton and Gordonvale and maybe even on the northern side at Aeroglen, Stratford, Freshwater and Redlynch,” he said. “This would certainly lift the congestion off the main roads and help to lift property values along these routes.“For people living in the city for the train station, I can’t see the day that it will happen as we are too isolated for it to be viable to commute this way, to head south by train to Townsville is six hours away. It takes four hours to drive it and it’s usually a clear run with very little traffic.”A CoreLogic spokesman said: “While being close to transport and amenities can increase incentive, we don’t consider these suburbs to be performing in a certain way on the basis of being ‘railway town’.” Babinda (house) Gordonvale (house)center_img Median value $322,486Yearly growth -3.0%3-year growth -1.1%5-year growth 8.6%Median Rents $380Rental change (1 year) 1.3%Rental change (5 years) 15.2%Rental Yield 6.1% Cairns North (Unit) FACTBOX Median value $241,442Yearly growth -0.7%3-year growth 1.7%5-year growth 13.6%Median Rents $335More from newsCairns home ticks popular internet search terms2 days agoTen auction results from ‘active’ weekend in Cairns2 days agoRental change (1 year) 1.5%Rental change (5 years) 19.6%Rental Yield 7.7% Median value $310,544Yearly growth -3.3%3-year growth -4.8%5-year growth 10.5%Median Rents $355Rental change (1 year) -2.1%Rental change (5 years) 4.4%Rental Yield 6.1%last_img read more

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