The Commissione di Vigilanza sui Fondi Pensione was set up in 1993 to oversee the activities of the country’s second-pillar pension schemes.In 2012, it had a budget of €11.2m, most of which is financed by pension schemes themselves.In the same year, the Italian state contributed only €200,000 to it.The plan is to merge Covip’s activities with Banca d’Italia, with the central bank assuming responsibility for the regulation of pension schemes.The country’s major trade unions – CGIL, CISL and UIL – have voiced their deep disappointment over the project, arguing that the loss of an “independent” authority would damage second-pillar pension schemes and their members.Additionally, the unions are worried that if Covip’s duties are assumed by Banca d’Italia, a conflict of interest will arise, since Covip currently regulates open pension schemes set up by banks and insurance companies, as well as collective negotiation-based schemes.Another concern is that, without a single authority overseeing the second pillar, workers will feel less protected and therefore less engaged with the issues surrounding pension planning.UIL released a statement by Domenico Proietti, a high-ranking official at UIL (Unione Generale del Lavoro) and former vice-president of Assofondipensione (the association of collective negotiation-based schemes), which states: “The idea of abolishing the authority on pension schemes is a very serious mistake. It is necessary to maintain a single, specific and independent authority to guarantee efficient and transparent provision of complimentary pensions. The government’s dreaded intention of transferring these competencies to Banca d’Italia would cancel those guarantees, as well as create a conflict of interests. If Covip were abolished, workers who are members of pension schemes would see the second-pillar system called into question again, while it has proved to be working.”Proietti instead called for the government to sponsor an information campaign about the benefits of second-pillar pension schemes.His position was wholeheartedly shared by CISL (Confederazione Italiana Sindacati Lavoratori).In a statement, CISL official Maurizio Petriccioli said: “The hypothesis of scrapping the Commission and transferring its duties to Banca d’Italia is wrong and dangerous. It is wrong because the costs of Covip do not weigh on the state’s finances since pension schemes finance its budget. It is dangerous because it represents a new attempt of blurring the act of saving for retirement with investment.”The statement adds: “[This decision] risks strengthening public or private lobbies, whose only interest is to put their hands on the pool of second-pillar pensions.”Statements from CGIL (Confederazione Generale Italiana del Lavoro) echoed those of UIL’s Proietti and CISL’s Petriccioli.The unions argue that Covip helps to keep pension schemes focused on their welfare purposes.Prime minister Renzi replied in an interview with Italian broadsheet La Repubblica, published last week, dismissing the criticism.He said the unions’ disappointment stemmed from their concern that his reforms, if approved, would decrease their political power.Renzi also pointed out that Covip’s current chairman, Rino Tarelli, who was appointed this year after Antonio Finocchiaro’s tenure came to an end, was a former high-ranking CISL trade unionist that enjoyed significant power for many years.Renzi’s reform plans, along with the abolition of Covip, have a long way to go.Mario Monti’s technocratic government had already attempted scrapping the authority for similar reasons during his tenure, which ended in 2013, but the parliament voted against the proposal, and Covip was kept alive.Marco Abatecola, general secretary at Assofondipensione, the association of collective negotiation-based pension schemes, said: “We think this is deeply wrong. It is fundamental to have an independent, specific authority for second-pillar pensions in Italy. Covip has done a very good job of assuring common rules for actors that are very different from each other – negotiation-based, bank-owned and insurance schemes. It has also ensured similar costs for everyone and effective communication with members. Covip guarantees for all. It is financed by pension schemes themselves, so it does not burden the country’s finances. Banca d’Italia has an important regulatory role in the banking and insurance sector. However, because there are schemes that belong to these sectors, and Banca d’Italia is effectively part-owned by banks themselves, then pension schemes should be regulated by an independent, impartial authority.”Andrea Canavesio of Italian pension consultancy Mangusta Risk highlights another issue, which lies with the strength of the authority.He said: “The banking, insurance and pension regulating authorities should be separate. The pension sector should have its own regulator.“Covip receives little help from the government, has a ‘light’ structure, and it is self-funded through contributions form pension schemes, so it has little impact on the government’s finances. Integrating Covip into the functions of Banca d’Italia would be justified only if it meant significant advantages for pension schemes.“There is a problem to solve, in that Covip has limited scope for action. So any plan to give the authority more resources would be welcome.”Covip declined to comment. The Italian government’s plans to scrap the pension regulator as part of a comprehensive reform of the public sector have sparked a wave of criticism by the country’s trade unions.Prime minister Matteo Renzi is working on a reform that will overhaul Italy’s public sector, in a bid to generate savings and ease business practices.The plans include abolishing costly public entities, including regulatory agencies that are deemed unnecessary.Pension regulator Covip is among the candidates for elimination.
PIEs have previously sparked some controversy and were criticised by then-pensions minister Steve Webb over the language used in literature for the exercises.Due to government and industry criticism, incentive exercises such as PIEs and enhanced transfer values (ETVs) are now subjected to a code of conduct.The code banned the use of cash incentives for participation and made providing independent financial advice to members compulsory.As part of a separate exercise, the fund also said it would start laying out its flexible retirement offer (FRO), offering members over 55 the chance to access their defined benefit (DB) pension in line with the new pension freedoms introduced in April.The tender also said the FRO would be part of its usual communication with all active members in future, but added that up to 30% of the 3,500 members able to take part would transfer their benefits out of the DB fund into a defined contribution (DC) vehicle of their choice.The use of FROs was expected to increase after the UK government added flexibility to DC schemes, with savers no longer being forced to purchase an annuity.Members of the BBC scheme will be consulted regarding the additional freedoms of DC schemes, including accessing pensions as cash, in order to increase participation.Both exercises would allow the BBC to reduce its deficit, which, according to the most recent actuarial valuation, stands at approximately £1.7bn. The BBC Pension Scheme is hoping that as much as 10% of its membership will sign away the need to offer inflation-proofed benefits as part of a planned pension increase exchange (PIE).The £10.8bn (€13.1bn) scheme, which closed to new entrants in late 2010, is planning to offer around 16,900 members the chance to take part in the PIE, which, at retirement, sees members offered higher up-front benefits at the cost of future statutory increases to inflation.As part of the three-month exercise, which the scheme expects to launch in November, the national broadcaster is tendering for independent financial advisers to support the fund’s 65,000-strong membership.According to the tender notice, the fund hopes 20-40% of those eligible to take part in the PIE – close to 17,000 members – will take up the offer, although a further 4,900 members over 80 could also be offered the opportunity to take part.
Kempen Capital Management – Mili Parekh and Katya Nelyudova have been appointed to the Kempen UK business development team, in London. Parekh is responsible for institutional relationships in the UK pensions market. Nelyudova is responsible for building Kempen’s wholesale distribution business in the UK. AP2, Government Pension Investment Fund, PRI, BlackRock, Lombard Odier, Société Générale Securities Services, Kempen Capital Management AP2/GPIF/PRI — Eva Halvarsson, the chief executive of Sweden’s second national pensions buffer fund AP2, has been elected to the board of the UN’s Principles for Responsible Investment (PRI), taking one of two new positions for asset owners. Hiromichi Mizuno, executive managing director and CIO of Japan’s Government Pension Investment Fund (GPIF) has been elected to the other open asset owner seat. Meanwhile, Peter Webster, director of international affairs at Vigeo Eiris has been voted in as a service provider representative. All three new board directors will start their three-year terms on 1 January 2017.BlackRock – Tony Stenning, head of retirement for EMEA, has decided to leave the asset manager for a career break. Stenning joined BlackRock in 2000 in the product management group, becoming head of the UK retail business in 2009. He held this position until 2015. Alex Hoctor-Duncan, head of EMEA retail, will take on Stenning’s responsibilities from the end of the year. In a memo, he said: “After a successful career spanning 16 years with the firm, Tony is planning to take a well-earned break in 2017 before deciding on the next chapter of his career.” Claire Finn will continue to lead BlackRock’s UK DC investments and strategic partnerships team. Stenning has also been chair of the Investment Association’s Investment Funds Committee and chair of The Savings and Investment Policy project (TSIP), a financial services initiative to help simplify savings and investment for savers in the UK.Lombard Odier – Lombard Odier Private Bank has appointed Michael Le Garignon as head of the firm’s independent asset managers offering for the UK, which is being launched next year. Le Garignon joins from Société Générale Securities Services, where he was head of business development, sales, and relationship management for the UK and Ireland. He has previously worked in business development roles at JP Morgan and BNP Paribas Securities Services.
Denmark’s AP Pension is investing DKK500m (€67.2m) in a new infrastructure fund focusing on European and US renewable energy assets, alongside other big Nordic and UK investors.Copenhagen Infrastructure Partners (CIP) announced last week that its new fund – CI III – had gained a further DKK5.2bn in investment commitments since March from institutional investors in the Nordic countries and the UK by its third close.A spokesman for commercial mutual pension provider AP Pension, which has total assets of DKK106bn, confirmed it was planning to invest DKK500m to the new fund, but was unable to give further details.AP Pension already has investments in renewable energy via the funds Green Power Partners I and II, as well as through CIP’s previous energy infrastructure fund CI II. Danish labour-market fund PensionDanmark, Norway’s KLP, and the Danish doctors’ pension fund Lægernes Pension were among the anchor investors in the fund, contributing to CI III’s initial DKK8.8bn of fundraising. This was made public in March.The fund is to invest primarily in large-scale offshore and onshore wind energy, solar PV energy, and biomass/waste-to-energy projects, as well as transmission and distribution assets primarily in north-western Europe and North America, CIP said.It said the fund had a strong pipeline of investment opportunities as well as ownership or exclusivity rights to nine energy infrastructure projects, comprising about €1.5bn of potential investments.The asset management firm said it expected subscriptions to the new fund to come from a broader international group of large investors in the next closings.Having received total commitments so far of DKK14bn, CIP said the fund’s target for subscriptions was still €3bn, with the fund remaining open until December.
The €409bn Dutch civil service scheme ABP has committed €500m to “green mortgages”, which come with a discount for energy-efficient residential property.The discount would not only apply to purchased assets with the highest energy efficiency, but also to the mortgaged property after it has been converted to meet the requirements of energy label ‘A’ during the duration of the mortgage.This way, both parties would contribute to improving the green credentials of the property market, ABP said.The pension fund added that its investment would be managed by Vista Hypotheken, a mortgage subsidiary of Rabobank focusing on consumers seeking clear and simple conditions combined with a long fixed interest period. Vista clients would be provided with easily accessible information about the options for increasing the sustainability of their property through sustainability adviser GreenHome.ABP said the investment was part of an overall commitment to allocate up to €800m in mortgages through Vista Hypotheken.Its combined worldwide holdings of residential mortgages total €9bn, €4bn which has been invested in the Netherlands.The civil service scheme said its latest commitment was part of its goal to increase the sustainability of its mortgages, and also contributed to its target of investing €58bn in total in sustainable development by 2020.Hikmet Sevdican, director of Vista, said that the energy efficiency discount made the mortgages stand out to institutional investors seeking investments focused on returns as well as sustainability.Rabobank launched Vista Hypotheken as a new brand for residential mortgages provided through intermediaries last April.ABP said that APG, its asset manager, had reserved €1bn in total for ABP and its other pension fund clients to invest in Vista Hypotheken, half of which was destined for sustainable mortgages.IPE will publish a special report on green finance in February’s issue of the magazine
“Although adoption of the new cost templates is voluntary, we expect pressure from institutional investors to drive widespread adoption among asset managers, and those that resist the CTI initiative run the risk of losing business from their institutional clients,” Cremonese said.She also warned that the Financial Conduct Authority could make the code compulsory if the voluntary regime was shown to be ineffective.“The fees asset managers charge their institutional clients are already under competitive pressure, and are much lower than those paid by retail clients,” Cremonese said. “The introduction of standardised cost and fee disclosure will weigh further on asset managers’ margins, including those for more insulated, less liquid asset classes such as private equity.”The impact on managers would vary depending on the size, complexity and duration of mandates, she added. Providers able to offer “innovative investment solutions tailored to a client’s financial goals, that have a long track record of strong performance and provide the best value-for-money proposition” were more likely to be able to resist downward pressure on fees.Asset managers with “solid” balance sheets were also likely to do better as they could offer less liquid investment options, Cremonese said.Further reading The UK’s newly launched investment cost reporting templates could hurt asset managers’ business models and financial stability, according to credit rating agency Moody’s.The Cost Transparency Initiative (CTI) – created by pension funds and asset managers to develop the templates – launched its reporting models last week after nearly two years of work.Versions of the templates have already helped UK local authority pension funds identify millions of pounds of previously unreported costs, and it is hoped they will be rolled out across the country’s £2.1trn (€2.4trn) pension fund sector.However, Marina Cremonese, senior analyst at Moody’s, warned in a report this week that the initiative was “credit negative” for asset managers “because it will likely make their cost and fee structures more transparent and easier to compare, encouraging institutional investors to negotiate rebates”. Managers urged to comply with new cost disclosure templates Pensions minister Guy Opperman has warned that the government could legislate to enforce the new disclosure model if it is not embraced by investorsLGPS investment costs hit £1bn as cost code sheds light on feesLocal authority funds reported investment costs of just over £1bn for the 12 months to 31 March 2018, according to new dataPwC: Asset management costs to drop 20% by 2025Charges for all asset classes will fall significantly in the next few years as more remuneration becomes performance-based
The long-term average contribution rate to the insolvency fund is 0.27%.Announcing the final rate this week, PSV said companies contributing to the fund would be paying around €1.1bn this year (2018: €725m), based on total balance sheet pension reserves of €348bn.In the first half of 2019, recorded business insolvencies were down 3.7% on the first year of 2018, according to the German statistical office, but in October it announced that local courts had reported 0.2% more business insolvencies in July 2019 than in July the year before.A relatively high profile insolvency in recent months has been that of UK travel group Thomas Cook, which filed for insolvency proceedings in late September. Its German subsidiary followed the parent company into insolvency. The pension plan sponsored by Thomas Cook in Germany had liabilities of around £365m (€417m) as of 30 September 2018.PSV does not comment on individual companies, a spokesman told IPE.The PSV is broadly comparable with the Pension Protection Fund (PPF) in the UK, although with some differences, for example with regard to the proportion of benefits they cover and caps on the compensation. Germany’s pension insolvency fund has set the levy rate for 2019 at a higher level than that forecast in July, as it had subsequently warned members would likely be the case.The final rate for 2019 will be 31 basis points, compared with 21 basis points in 2018.In July the Pensionssicherungsverein (PSV) told members that the contribution rate could be less than 20 basis points, but in early October it announced the rate would likely be considerably higher – between 30 and 35 basis points – on account of “multiple insolvencies in the last few months”.These would lead to a noticeably higher claims volume than what had been expected in the middle of the year, the Cologne-based institution said at the time.
Denmark’s central bank chief issued a stark warning to the country’s pension sector today, saying scheme design and public policy must be changed to take account of the current challenging environment.Lars Rohde, governor of Danmarks Nationalbank told an audience at the IPE Conference and Awards 2019 in Copenhagen: “Pension scheme design and public policy need to support and incentivise the transition to a more sustainable balance between paying more, working longer, and accepting lower pension income.“Kicking the can down the road will only postpone and aggravate the challenges which need to be addressed,” he said.Institutional investors and the pension system were now being challenged by lower interest rates, and this was further compounded by the weak outlook for growth, as well as demographic developments, he said. Rohde said there was no substitute in the period ahead for acknowledging the conditions faced today, increasing transparency about implications for pension plans, and finally, adjusting expectations and behaviour accordingly.More and more pension plans were recognising the impact of the low-rate environment and adjusting expected return assumptions, he said, with Council for Pension Projections in Denmark having recently cut assumptions over a 10-year horizon for eight out of 10 asset classes.By reducing the stock of defined benefit plans, pension funds had transferred a large share of the risk from the low-yield environment to present and future pensioners, he said, but added that this assumed individual savers were well-placed to make informed investment decisions.Pension savers would ultimately face the unpopular choices of pay more now, work longer, or spend less later, he said. Lars Rohde, Danmarks Nationalbank governorSince it was not clear that future pensions would accept lower benefits, even though they were currently taking on more risk, Rohde warned: “The government – and ultimately taxpayers – may end up as ‘pension providers of last resort’.”Detailing the investment challenges for pension funds, he said it was clear schemes would not be able to meet obligations to retirees solely based on investment returns from bonds.On the other hand, he said there were many risks inherent in increasing exposure to alternative and less liquid assets to boost returns, including that many of these assets were untraded – making it hard to estimate expected return and price risks correctly.“To put it bluntly, if my pension is invested in long-term illiquid assets, I would prefer my pension company to be run by a younger CEO,” he said.“That way, I would be able to hold him or her accountable for how these investments pan out – avoiding moral hazard problems.”A larger share of illiquid assets also ramped up liquidity risks, he said, noting that from 2023, pension providers would need even more liquidity when the requirement for central clearing of interest rate swaps and other derivatives was introduced.“Setting aside more liquid assets to cover liquidity risks also means fewer funds available to invest counter-cyclically. Pension funds will then have less flexibility to buy assets traded at distressed price levels,” he said.He added that this could be “unfortunate” from a systemic perspective, if pension funds were less able to play a stabilising role in periods of market stress.
The current external asset managers are UnipolSai Assicurazioni and Società Cattolica di Assicurazione.Additionally, the scheme is also planning to hire an internal auditor.It said the new role is in compliance with the IORP Directive. it added that interested candidates must communicate their interest in the position via e-mail ([email protected]) by 18:00 on 21 January.Cometa will then send full documentation, including an employment questionnaire, which must be completed and sent to the fund by midday 7 February.Gomma Plastica seeks general managerFondo Gomma Plastica, the supplementary pension fund for workers in the rubber, electrical and related cables and plastics sector, which has assets worth more than €1.3bn, is seeking to hire a general manager.Davide Alliori, the fund’s current general manager, did not return IPE’s requests to comment on his role and future at the scheme.The fund has recently announced its employer and employee representatives for the next three-year mandate (2019-2022), along with its new administration committee.Applications for the position of general manager must be sent by midday 24 January via email ([email protected]).Intesa Sanpaolo scheme to recruit adminThe defined contribution pension fund of the Intesa Sanpaolo Group is planning to appoint an administrator.Applications must be received only by post at the fund offices (Piazza degli Affari 3, 20123 Milan), by 16:00 7 February.The call for tenders can be requested from the scheme by 6 February via email ([email protected]). The board of directors at Cometa, the national supplementary pension fund for the metal industry, worth more than €10bn in total assets, is seeking to hire fund managers for its ‘sicurezza’ and ’sicurezza 2015’ investment options, which are worth more than €1.4bn.The investments are mainly in fixed income, following the JPM Italy 5–7 anni (95%) and DJ Eurostoxx 50 (5%) as benchmarks.Cometa said the manager appointments are expected in April and participating managers can apply online.The portfolio is oriented towards medium-term bonds, and include investment grade bonds as well as private debt in the OECD area.
Lounge room. Supplied. The Broadbeach Waters house before the big reno. Last year’s House Rules winners Aaron and Daniella have sold their Gold Coast reno project. Picture: Nigel HallettHOUSE Rules stars Aaron and Daniella Winter have proved they know how to renovate on and off the small screen after selling their latest Gold Coast renovation project.The 2017 winners of the Channel 7 show sold their Broadbeach Waters property for $1.662 million – $600,000 more than what they paid for it. The backyard and pool. Supplied.More from news02:37International architect Desmond Brooks selling luxury beach villa15 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago And after- what a transformation!The pair snapped up a two-storey Broadbeach Waters renovator for $1.015 million in September, 2017 just a few months after collecting $200,000 prize money on House Rules, with the intention to “flip and sell”.It took the couple just three months to complete their project, while juggling family life with their two young sons at their nearby home. 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 home00:51 Entertain by the pool. Supplied.“Some of the work had already been pre-done and had council approval which is what we wanted, but we discovered the whole house was pretty much riddled with termites,” Mrs Winter told the Gold Coast Bulletin when the property first hit the market earlier this year.“It took three days to demolish the house and another eight days to rebuild it again. We pretty much rebuilt a house in three months.” View into the dining room and kitchen. Supplied. The dining room. Supplied.The now rendered residence is resplendent in timeless grey and white, with matching muted tones inside, accentuated by timber floorboards and Caesarstone throughout.“It’s a two-storey modern coastal home, we raised the ceilings up to three metres high, and put a rake on them as well as a feature panel.” One of the living areas. Ray White Mermaid Waters principal Mitch Palmer handled the sale.Property records show the house initially hit the market in March through an expressions of interest campaign.It was then listed with an asking price of offers over $1.85 million before dropping to offers over $1.75 million in April.It sold on April 30 and settled three weeks later.