Dutch electronics giants Philips makes €600m contribution to pension fund

first_imgEven though the scheme has now surpassed the legally required financial reserves of 107% coverage, it warned that it still considered itself to be in the “danger zone”, and was therefore still deliberating over the possible indexation of pension rights.The Philips Pensioenfonds said it lost 0.3% on its 70% liability-matching portfolio – meant to finance most of its liabilities, as well as 2% inflation – during the fourth quarter.In contrast, the scheme’s 30% return portfolio generated 5.5%, thanks to well-performing equity and high-yield credit.The return portfolio, which also includes emerging market debt and property, is to bolster its financial buffers and finance any surplus inflation and longevity risk, the scheme said.The pension fund attributed the 0.2% outperformance in particular to the returns on high-yield credit and commodities. Dutch electronics giant Philips is to boost the assets of its €14.9bn pension fund with an additional contribution of €600m.It said €500m would be used to increase the coverage ratio of the Philips Pensioenfonds by 3 percentage points to 111%.The extra contribution, it said, is the result of a new collective labour agreement (CAO) between the employer and the unions.The Philips scheme reported a quarterly return of 1.3%, leading to funding of 108% at year-end, and an annual return of 0.6%.last_img read more

Pension funds need dissenting views on boards, says Dutch supervisor

first_imgCurrently, pension funds are busy seeking new board members and internal supervisors – following new governance legislation which is to come into force on 1 July – who all need to pass an assessment by DNB.Kellerman indicated that even people who have never been on a pension fund’s board could pass the test. “We not only assess individual board members, but also look at the board as a unit. Therefore, a fresh look could be a welcome addition to the collective,” she said.“The smartest person is not by definition the best board member,”she continued. “We also assess whether he or she can hold his or her ground within the board.”According to audience members at the conference, appointing external board members could prove advantageous. “They are motivated specialists with expertise, as they are familiar with other board and know best practices,” summarised Jillert Blom of Fidelity Worldwide Investment. “And if they don’t fit, the board can replace them with others.”“They also provide a cheap way of acquiring expertise,” argued Olav Loeber, an adviser for the National Register for external board members.“The costs of having an external board member for one day a week is €25,000 a year. This compares very favourably with the costs of a consultant.”That said, according to Blom, a pension fund’s long-term policy and culture is not guaranteed, if it has too many external board members. “For the internal communication, it is important that a board member knows the sector or the company,” he pointed out.Frans Prins, director of the €4bn pension fund PWRI, remained sceptical about external board members, and fretted about the costs of somebody who did not know the sector.In his opinion, it would not prevent the need for a consultant, “as an external board member also understands very well that he needs an actuary”.Therefore pension funds should take care themselves of a proper education of their board members, he made clear. Dutch pension funds could benefit from dissenting views on their board, as those espousing them could provide a fresh perspective and encourage proper decision-making, Joanne Kellerman, director pension funds at supervisor De Nederlandsche Bank (DNB) has argued.“A colleague who doesn’t agree with business as usual, could act as an eye opener for risks or problems others fail to spot,” she said during a symposion of magazine Pensioen Bestuur & Management (PBM) last week.In her opinion, dissidents on the board could be external experts on risk or asset management, pensioners or younger participants.“Expertise and diversity are useful on a board,” she stressed.last_img read more

Second-pillar funding in Switzerland reaches post-crisis high

first_imgThe average funding level for non-public pension funds in Switzerland has increased to 113%, according to estimates based on Swisscanto’s most recent survey of the sector. The figure marks the highest level of funding since the financial crisis, while pre-crisis levels were slightly higher only in 2006, at 113.7%, Swisscanto said.According to the asset manager, a 4% average return over the first half of 2014 went far in raising funding levels for the 370 Pensionskassen, managing a combined CHF506bn (€413bn) in assets, that took part in the survey.The return was chiefly the result of the performance of equities, Swisscanto said, although it pointed out that recent surveys had shown a “slightly anti-cyclical” approach among Swiss schemes, with the average allocation to the asset class at less than 30%. The survey also found a wide range of equity returns, even among those schemes with the same allocation.Swisscanto said this meant the “whole asset allocation, in addition to the make-up of the equity allocation, was decisive for performance”.Similarly, the asset manager stressed that the funding level alone did not paint a full picture of a Pensionskassen’s solvency.“Measures such as the share of pensioners, the discount rate (technischer Zins) applied or the average age of active members must also be taken into account,” it said.PPCmetrics has integrated these additional factors into its calculation for Swiss schemes’ risk-adjusted funding levels, which, based on a sample of 200 pension funds managing CHF450bn in combined assets, showed an improvement compared with last year.The consultancy said the risk-adjusted funding level of non-public pension funds increased from 94.3% at the end of 2012 to 107.1% year on year, and to 109.7% as of the end of August 2014.“Despite this positive development,” it added, “there are still several private pension funds with a risk-adjusted funding level well below 100%.”PPCmetrics said those schemes were mainly Pensionskassen with a high proportion of pensioners.The consultancy said those funds presented a potential risk for active members in the event of a company leaving the Pensionskasse, at which point risk buffers must be divided.Swisscanto also sounded a note of caution on the record funding level, pointing out that the 113% average was still below the 116% calculated as the requisite buffer based on pension funds’ asset allocation.last_img read more

Governance changes, regulatory action needed to grow infrastructure holdings, says OECD

first_imgAccording to the OECD, the growth of alternative investments such as infrastructure was challenging the traditional governance models in place at many institutions.“For example more expertise at the level of pension board members will be required perhaps including specialists that have appropriate asset and risk management skills.“In order to reduce costs and agency risks many funds are also looking at insourcing asset management,” the survey said.“Still, the risks of being different – by adopting unconventional asset allocation techniques or investments – are a challenge or even a barrier for investors.”The report stressed that it would be of ever-growing importance to monitor the systemic risks posed by larger pension funds, emphasising the need for sound governance and  regulatory oversight.It further recommended that governments and regulators start collecting and standardising data around long-term investments, so that differing methodologies and definitions do not hinder the ability to compare performance.“Definitions of alternative assets which ensure that the data collected and reported is comparable across pension funds is required in order to monitor the flows into different types of alternative assets and their respective cost and performance,” the survey said.“This is vital not only for investors but also for regulators and other policymakers in order to help them better understand the exposure of pension funds in different countries and to develop appropriate regulation.”,WebsitesWe are not responsible for the content of external sitesLink to annual OECD survey of large pension funds Sovereign wealth and pension reserve investors worth $7.8trn (€6.2trn) only allocate 1% of assets to infrastructure, with regulatory action and governance changes needed to allow for greater investment, according to the OECD.The think tank’s annual survey of large-scale asset owners, which investigated the institutions’ long-term investment activity, found that only $80bn of the surveyed assets were allocated to infrastructure.It found that the allocation to infrastructure had been stable since 2010, and said that the future growth in the market would be determined by regulation and availability of projects.The overwhelming majority – or $70bn of assets – was invested in unlisted infrastructure, with the remainder in infrastructure debt. Of the unlisted exposure, 29% was held in unlisted funds, and 68% in direct or joint ventures projects – an allocation that had grown since 2010.last_img read more

ING’s Dutch pension fund appoints chief executive from within

first_imgAldrik Venemans is to take the helm at the €25bn Pensioenfonds ING, succeeding Jos van Kleef, who has been in the job on a temporary basis since January.Venemans has been working at the ING scheme’s pensions bureau since 2011 as a financial risk manager and an investment strategist.He participated in negotiations over the pension fund’s financial independence from ING in 2014, and was the driving force behind the resulting plan for balance management.Last year, the scheme closed to new entrants. Pensions accrual is now taking place in a new ING collective defined contribution Pensioenfonds.Prior to joining ING in 2011, Venemans held actuarial positions at consultancy Mercer and PVF Achmea, one of the predecessors of pensions provider Syntrus Achmea.The Pensioenfonds ING has seen several changes in leadership since the departure of Daan Heijting in 2013, who, after five years at the helm, left for Timeos, provider for the €20bn pension fund PGB.Heijting was succeeded by Albert Smolenaers, who acted as interim chief executive for 10 months.His successor, Corné van Nijhuis, left after just eight months for unknown reasons.In a statement, Rients Prins, chairman at the pension fund, said the board had sought a chief executive with expertise in pensions, as well as knowledge of the ING scheme.He added that the board had looked for a candidate who enjoyed “support” within the ING scheme.As of the end of August, the Pensioenfonds ING’s funding stood at 139%.last_img read more

Chart of the Week: Analysts flag declining corporate sentiment

first_imgMarty Dropkin, global head of research for fixed income, said the impact of the US-China trade negotiations was a key issue that “has brought a lot of uncertainty into the system”.“Manufacturing remains a key driver of growth for the Chinese economy as a whole, and for consumers, the uncertainties extend to their prospects for wage growth, which has a second order effect on consumption,” Dropkin added. “However, investors should be mindful of Beijing’s ability to stimulate the economy.” Investors have been speculating for some time as to when the bull market in equities would turn.The fourth quarter of 2018 appeared at first to be a turning point, but most investors who lost out at the end of the year have seen their portfolios bounce back.However, according to Fidelity International’s annual analyst survey, global corporate sentiment has fallen to its lowest level since 2016 amid weakening consumption and rising costs.This year 165 Fidelity equity and fixed income analysts participated in the survey, which aggregates data gleaned from the more than 16,000 meetings they had with listed companies around the world in the past year. Meanwhile, corporate sentiment in China has turned negative (-0.4) – the only region to record a negative score in this year’s survey. Of Fidelity analysts covering China, 70% said they expected returns to decline this year.center_img The 2019 survey shows that corporate sentiment – as seen through the eyes of the analysts – has dropped from 1.6 last year to 0.6, where anything above zero is positive sentiment and below is negative.A third of Fidelity analysts said their sectors were in a slowdown or recession, compared to 13% of analysts last year. According to the asset manager, analysts are split 51% to 49% as to whether the business cycle is at an end.Michael Sayers, director of research for equities, said: “An exuberant start to 2018 has given way to a cautious 2019. This year’s pessimism has two core drivers, a weaker consumer and increasing costs of doing business – both of which threaten to squeeze profit margins in 2019.“While we do not see a full-blown recession in the next 6-12 months, it is clear we have taken another step towards the end of the cycle that started a decade ago and, as a result, corporates’ approach to risk management is more important than ever.”last_img read more

BlackRock accused of ‘myopic’ fossil fuel investment

first_imgA BlackRock spokesperson said the majority of its equity holdings, including those cited in the IEEFA’s report, were held through index-based exchange-traded funds and other index products, which track the investment results of third-party indices.“Index managers such as BlackRock seek to replicate the performance of the index and do not select or exclude one company over the other based on our views of a company,” the spokesperson added.“Index providers determine which companies to include in the indices they create based on the index methodology. The conclusions of this report are thus misplaced.”“A new path is needed that leads BlackRock, its clients and the global economy toward climate health and a new cycle of profitability and growth”IEEFAA source at a large asset manager backed up this view, saying that underperforming due to investment in fossil fuels was not BlackRock’s fault.“Investing in ETFs that track the stock market is particularly difficult during a period of market transition, where previously valuable sectors can become redundant,” the source added.The individual suggested a better question would have been whether BlackRock took an active bet toward fossil fuels that did not work out.Stewardship questions IEEFA has criticised BlackRock for its holdings in fossil fuel companiesIn its report the IEEFA also accused the world’s largest asset manager of a failure of stewardship across its passive investment portfolio, saying it had steered away from leading low-carbon strategies adopted by investors such as Sweden’s AP4.BlackRock had instead opted to pursue a strategy of engagement with companies, but it was “entirely questionable” whether this approach was yielding material results.IEEFA also argued that BlackRock’s board was a problem, with too many of its members in key decision-making roles having “significant ties” to the fossil fuel sector.The think tank made five main recommendations for BlackRock, including leading the way on investing in low-carbon indices and adopting a strategic use of fossil fuel divestment.“BlackRock plays a powerful leadership role in the current global investment debate over the direction of fossil fuel investing, but the direction it is largely offering is backward,” said the IEEFA.“A new path is needed that leads the company, its clients and the global economy toward climate health and a new cycle of profitability and growth.”BlackRock has faced a steady stream of criticism over its activity with regard to climate change in recent years.The anonymous source told IPE that the attention the report from the IEEFA had received in the media was more interesting than its substance “as a reflection of the scrutiny that is turning to fund managers on their decisions and the connection between rhetoric and actions”.“Some will be misplaced, but the spotlight is clearly moving in our direction,” the individual said. A think tank has accused BlackRock of costing its clients more than $90bn (€81.4bn) from a select group of fossil fuel-heavy investments – although the asset manager has challenged the methodology and findings of the organisation’s report.According to the Institute for Energy Economics and Financial Analysis (IEEFA), BlackRock’s management of its fossil fuel holdings was “myopic”.“In holding after holding across the coal, oil and gas space around the world, weak performance over the last decade lags the market and weakens both actively and passively managed investments,” the think tank said.It highlighted the case of BlackRock’s holding in General Electric, which it said had declined by $19bn in value over a three-year period.last_img read more

Gold Coast home’s modern design something special

first_img69 Seagull Ave, Mermaid Beach.“Standing from our bedroom looking down over the pool, it’s just absolutely gorgeous,” Mr Jurisich said.The couple were reluctant to sell the four bedroom, four-bathroom house they have called home with their children for the past year but were looking forward to starting another project.Mr Ross said it was worth two years of designing and building.“We’ve ended up with an amazing house, which someone else is going to be very happy with,” he said.“We will definitely miss it.” 69 Seagull Ave, Mermaid Beach. 69 Seagull Ave, Mermaid Beach.More from news02:37International architect Desmond Brooks selling luxury beach villa16 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago69 Seagull Ave, Mermaid Beach.It is expected to fetch a multimillion-dollar price.Mr Jurisich said in a time where Hamptons-style homes were all the rage, they wanted something different.“The idea is that we wanted something that was quite subtle but when you walk through the front gate, it had that wow factor to it,” he said.“We’re not flamboyant people — it doesn’t have to shout from the street but we wanted the detail on the inside.“Modern architecture is also timeless and it’s quite discrete.”The seamless blend of outdoor-indoor living was one of his favourite parts of the home as well as the master bedroom’s window overlooking the pool. 69 Seagull Ave, Mermaid Beach.center_img 69 Seagull Ave, Mermaid Beach. 69 Seagull Ave, Mermaid Beach.IT may look like your average home from the street but inside is something special.High ceilings and walls of windows make the Mermaid Beach home feel much bigger than it is while bespoke features, including pendant light fixtures and a jaguar-stone kitchen benchtop, draw the eye.Owners Ross and Megan Jurisich have listed the Seagull Ave home they spent a year designing with Gold Coast architect Bayden Goddard on the market.last_img read more

The Gold Coast suburbs in the million-dollar club

first_imgThe Gold Coast has five suburbs in its million-dollar club.GONE are the days when cheap beach shacks lined the streets of Mermaid Beach.The latest REIQ Quarterly Market Monitor Report, which was released at the weekend, shows the central suburb was the most expensive on the Gold Coast with a median house price of $1.556 million.Clive Palmer’s purchase of a beachfront home at 9 Hedges Ave in Mermaid Beach was a standout sale in September — fetching $12 million.More from news02:37International architect Desmond Brooks selling luxury beach villa13 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days agoOther suburbs in the million-dollar club include Surfers Paradise ($1.375 million), Broadbeach Waters ($1.15 million), Paradise Point ($1,077,500) and Clear Island Waters ($1,054,950).REIQ chief executive Antonia Mercorella said the annual median house price had surged to $629,000 in the past five years.“Over the medium term, the annual median house price increased nearly $155,000 from … $475,000 in September 2013,” she said.Main Beach topped the list of most expensive suburbs for units with a median of $720,750 followed by Hope Island and Hollywell. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 4:18Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -4:18 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels576p576p400p400p320p320p228p228pAutoA, 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 Rate1xFullscreenNovember 6: Prestige listings04:19last_img read more

Southside house’s stunning flip

first_imgThe bathroom has been brought into the 21st century.“The master bedroom is huge and it’s got an awesome walk-through wardrobe behind it with an abundance of shelves and an ensuite with a double shower and double vanity,” she said.Mrs Lee said the house was across the road from a park, with kilometres of walking tracks. A laundry and butler’s pantry combination provides loads more space.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 There were terracotta tiles and a wall dividing the kitchen and living room. The house has had a modern facelift.WHEN Linda and Adam Lee bought their Algester home about a year ago, it was tidy but tired.But that is exactly what attracted them to it. The master suite is Mrs Lee’s favourite space. Removing the wall and changing the floor has completely transformed the area.The kitchen has gone from cream and brown features to crisp white subway tiles, a natural stone benchtop and not one, but two ovens. There is also a butler’s pantry off the kitchen.However, it is the master suite that Mrs Lee likes most.center_img Brown and cream were the colour scheme for the house. The house was tidy but tired.The couple were looking for a property to renovate, and the lowset brick house at 14 Yorrell St fit the bill.“We were attracted to the fact it needed a lot of work,” Mrs Lee said.“We completely gutted it and started again, rendered the outside and put a carport on.” The kitchen was in good condition but dated. More from newsParks and wildlife the new lust-haves post coronavirus13 hours agoNoosa’s best beachfront penthouse is about to hit the market13 hours agoThe kitchen is now open plan.They were going for an elegant and modern style, and for the most part, Mrs Lee handed over the reigns over to her husband.“He did most of the work along with the contractors, and he made about 70 per cent of the design decisions,” Mrs Lee said.last_img read more