It said it expanded its position as market leader in a saturated market, and that customer retention had been more effective than in 2012.“In relation to new sales, PFA is being very selective and has refused or withdrawn from several pension tenders where the tender documents did not allow for value-creation and securing profitable customer relationships,” it said.Heideby said 2013 was a very good investment year for customers with savings in the unit-link product PFA Plus.The return on unit-linked products slipped to 5.2% before pensions tax (PAL) from 7.8% the year earlier, while with-profits pensions made an investment loss of 2% compared with a profit of 8.3% over the same period last year.Contributions to PFA Plus increased by 48% year-on-year before internal transfers and, at the end of September, represented 66% of the total contributions.PFA said it was the only pensions provider to offer all customers with guaranteed pension products a share of the reserves if they switched to the unit-link product.As a mutually owned company, PFA puts aside around 5% of customers’ savings as capital, or KundeKapital, on which customers receive an annual return.PFA said the transfer allowance was calculated according to regulations and in close dialogue with the FSA to make sure it was reasonable both for customers leaving the guaranteed product and for those remaining with it.Total assets under management rose to DKK373bn from DKK351bn, and solvency coverage rose to 225% from 205%. Denmark’s biggest commercial pension fund PFA has reported strong business growth in the year so far, with contributions up 14% from last year even though the company said it had been very selective regarding new sales.Henrik Heideby, chief executive at PFA, said: “PFA’s high level of growth in customer contributions continued in the third quarter.”In the first nine months of 2013, contributions rose 14% to DKK19.4bn (€2.6bn) from DKK17bn in the same period last year, the company said in its interim report.PFA said the growth in contributions reflected the fact more and more companies were choosing it as a pensions provider.
“This does not mean the current system is working optimally or can alone provide satisfactory governance in today’s world,” he told delegates.”We must be open to continuous reform and guard against the bureaucratisation of the UN, and we must stress the vital importance that a competent and impartial international civil service be maintained.“And we must remember that the UN is an orchestra of many instruments and that the failure to produce harmonious music may be less to do with the deficiencies with the instrument than with the musicians who refuse to play or insist on playing their own tunes.”Blix said he did not doubt globalisation and the increasing interdependence of states – economically, environmentally and politically – was the single factor that pushed the hardest for cooperation and against clashes and conflict.But he added: “We need all – governments, business and NGOs – to participate in this effort and to use the United Nations as a key instrument. As [second UN secretary-general] Dag Hammarskjöld said, we should not expect the UN to take us to heaven, but it may help us to avoid going to hell.”He said the world must also be aware that, increasingly, the European Union and other regional organisations – such as NATO and the Organisation of African States – shared the burden of international governance, and that informal groups such as the G8 or G20 functioned as mechanisms helping to create international consensus and action. Only a few hours before global NGOs staged a mass walk-out of climate talks in Warsaw, he also noted that, increasingly, civil society – the global NGO community as well as the global business community – had been brought into the dialogue and been enabled to contribute and influence.He pointed out that, since 1993, there had been a convention against the possession and use of chemical weapons.It was under this convention that most states, including the large powers, and now Syria, were destroying their chemical weapons, he said. Blix added: “The world has come a long way from the quarrelling and warring chiefdoms of past centuries, but it has still a long way to go to reduce armed conflicts, bloated arsenals and the shocking annual global military expenditures of $1,700bn.“We must remember the UN is an orchestra of many instruments and that the failure to produce harmonious music may be less to do with the deficiencies with the instrument than with the musicians who refuse to play or insist on playing their own tunes”Hans Blix, former UN weapons inspector“It has a long way to go to create humane living conditions for a world population that needs to further slow its growth, and it has a long way to go to secure access to sufficient energy for all without risking to destroy the global climate – as we are now busy doing.”Blix said he also believed that traditional reasons for war – such as a desire to achieve self-determination, the drawing of new borders and the armed grabbing of land – were either a “thing of the past” or no longer cause “major conflagrations”.They could also be settled judicially.“Religion and ideology have been important triggers of war in the past, but, with the end of the Cold War, it is hard to imagine that differences in ideology could again ignite armed conflict.“The clash of civilizations that was much discussed a few years ago will certainly not lead to large wars. Al Qaeda is not the Muslim world.”He questioned those who predicted the possibility of armed conflict over resource scarcity, despite resources of the Middle East, Central Asia and the Arctic being subject to “competing” energy projects and pipelines.“These competing interests are more likely to play out in prices than in armed action,” he said. “An important development in the energy sphere has occurred with the rapid introduction of fracking that is now making the US self-sufficient in gas and even exporting.“Control of the Middle East may become a less vital US strategic interest, and China and Russia may find a somewhat slackening of US interest in Central Asia.” The UN still has a critical role to play in the peace process, according to Hans Blix, former UN senior weapons inspector and former foreign minister of Sweden.Blix addressed the audience at the IPE Awards Seminar in Noordwijk, the Netherlands yesterday, saying: “I have noted the reports that the number of interstate wars in the world has gone down and that there may be increasing restraints against launching unauthorised military interventions. “It would be rash, however, to attribute this evolution simply to a growing respect for the rules of the UN Charter.”However, while recognising that the UN Charter rule restricting the use of armed force remained an uncertain barrier against the risk of armed violence, he noted that the UN system offered “important opportunities for dialogue, conciliation and joint action”.
A Swiss pension fund is searching for an asset manager to run a segregated portfolio of small and mid-cap European (including UK) equities, according to a new search posted on IPE-Quest.The unnamed pension fund is looking to award a €100m mandate.The manager should use a core style with an active investment process, benchmarking the portfolio against the MSCI Europe Small Cap Net TR EUR index.Firms applying should have at least €1bn in assets under management in this investment segment, and a minimum of €1.5bn under management in overall assets. They should also have a track record of at least six years.The search stipulates various requirements of managers applying, including their ability to customise the investment guidelines so they customise the benchmark, use no leverage and no derivatives. The maximum ex-post tracking error over a three-year rolling period should be less than 5.5%.The proposing firm should also have a “demonstrable fiduciary investment management mindset”, and the organisation’s focus should be on institutional money management with experience in managing segregated accounts, and willingness to offer this to new clients.The closing date for the search is 25 July.
UK retailer Tesco has chosen Legal & General Investment Management (LGIM) to run its new defined contribution (DC) pension fund despite its having established in-house asset management capability for its defined benefit (DB) fund.LGIM said the Tesco Retirement Savings Plan had been in place since November last year, and already enrolled 200,000 members.Emma Douglas, head of DC at LGIM, said the supermarket was looking for a partner able to administer what she believed was the largest single private sector pension fund.“Tesco, which have supplemented our Master Trust board with a highly capable DC Governance Committee, needed access to a very diversified range of highly competitively priced assets, including infrastructure, private equity and emerging market debt, to help to meet the objective for their default strategy of optimising net risk-adjusted outcomes for members,” she said. The supermarket chain is among the largest employers in the UK and announced in September last year that its DB fund would be replaced with a DC scheme, where contributions of 4-7% would be matched by the company.The closure of the DB fund comes after the latest triennial valuation showed the deficit rising from £934m (€1.2bn) in 2011 to £2.8bn in 2014, with its financial statements showing a £3.9bn deficit on an IAS 19 basis.A spokesman for Tesco did not directly respond when asked whether Tesco Pension Investment (TPI), the in-house asset manager set up in 2012 to oversee the company’s £10bn DB fund, had been considered as manager for the new DC arrangement.At the end of the most recent financial year, TPI employed 38 staff, an increase of two employees over 2014.For more on TPI’s approach to asset management, read IPE’s interview with CIO Steven Daniels
The Pensions Regulator (TPR) has fined a UK trustee company for failing to file a new governance statement required from all defined contribution (DC) trustees.Pitmans Trustees Limited (PTL) was fined a total of £6,000 (€6,900) by the regulator, with the maximum possible fine of £2,000 levied against three breaches, over its failure to submit signed governance statements on behalf of three schemes.Nicola Parish, executive director of frontline regulation at TPR, warned that it would enforce the law where schemes fail to have a governance statement signed off by the DC fund’s chair of trustees.A case report prepared by TPR said the breaches related to the Precision Carbide Tools Limited Pension and Life Assurance Scheme, the Comshare Retirement and Death Benefits Plan and the EBC Pension Scheme. “In their correspondence, PTL told us that they had taken action and prepared the required statements after the breaches had occurred,” TPR’s report on the matter added.It continued that the maximum fine was imposed, as there wee no mitigating factors, and all three funds employed a professional trustee.Parish added: “Professional trustees are expected to meet a higher standard of care and to demonstrate a greater level of knowledge and understanding than other trustees.“We will act where trustees demonstrate that they are not complying even with the basic duties we expect,” she said.PTL could not be reached for comment at time of writing.TPR had previously issued a £500 warning to the trustee of the Abbey Manor Group Pension Scheme for failing to sign the new chair’s statement.It comes as the regulator pushes for improved trustee standards, setting out its vision of modern trusteeship in a recent consultation.
The International Accounting Standards Board (IASB) has confirmed it will press ahead with a series of potentially controversial amendments to its IAS 19 asset-ceiling guidance known as IFRIC 14.A total of 10 board members agreed the move at the standard setter’s 13 December meeting.Lane Clark & Peacock LLP’s Tim Marklew said: “I see the IFRIC 14 amendments as a huge issue for UK companies.”He added that he saw the changes as less worrying than parallel amendments to International Accounting Standard 19, Employee Benefits (IAS 19), which deals with the need to update plan assumptions. Last month, the LCP warned that the shift in focus of the way the committee drafted its proposals could affect more DB plan sponsors than first believed.The IFRIC 14 changes in their current form could force schemes to recognise an additional liability where a scheme’s trustees have the power to mount a buyout.The news comes as scheme sponsors battle to contain ballooning pension deficits brought in a low-interest-rate environment.The International Financial Reporting Standards Interpretations Committee (IFRS IC) proposed the IFRIC 14 amendment in 2015.It is intended to clarify how sponsors should take account of the right a third party might have to wind up a plan or adjust member benefits without the sponsor’s consent.In general terms, the amendment means a sponsor does not have an unconditional right to a surplus if other parties can use the surplus to enhance members’ benefits.Although a sponsor can recognise a surplus even if trustees can wind up a plan without its consent, the sponsor cannot assume a gradual settlement of plan liabilities.It is this aspect of the proposed changes that has provoked the most concern among IASB watchers.LCP’s Tim Marklew added: “In other words, the committee is closing off the route whereby some companies assumed a plan would simply run off in line with assumptions where the trustees have the power to buy out the scheme.”Finally, the committee has also ruled that a decision by trustees to purchase an annuity as a plan asset does not affect the sponsor’s ability to claim a refund.Critics of this proposal argued that it draws a false line between a buy-in and a buyout.The latest amendment to IFRIC 14 looks at how an entity assesses the availability of a refund when other parties can either adjust member benefits or wind up a plan without the sponsor’s consent.It does not deal with the availability of a reduction in future contributions.Staff signalled during the meeting that they would clarify in drafting that a power to settle plan liabilities individually with plan members is not caught by the interpretation.
Denmark’s biggest commercial pension fund PFA Pension posted a 3.3% loss in 2018 for customers with market-rate pensions, as equity market falls at the end of the year took their toll.The loss, measured according to the Danish FSA’s N2 standardised reporting figure for market-rate pension returns, compares to an 8.2% profit reported in 2017.Customers with average-rate pensions saw a return of 0.7% last year at PFA, according to the N1 standard, down from 3.5% in 2017.Allan Polack, PFA Pension’s chief executive, said: “A negative return is never pleasant, but the unrest on the financial markets did not come unexpected, and we have succeeded in reducing the losses through a strong focus on risk management.” Allan Polack, PFA PensionOver the last five years, Polack added, PFA customers had received a cumulative return of 41.9% with the recommended investment profile even including the negative 2018 result.Releasing its annual report, PFA said it had significantly increased its investments in unlisted property, infrastructure, green energy and logistics in recent years.When markets faced turbulent periods, it was important to look to sources of return that were less sensitive to market fluctuations than shares and bonds, the provider stated.“During 2018, this area was further strengthened, and PFA now has approximately DKK90bn [€12bn] placed in unlisted investments,” the pension fund said, citing its investment in telecoms operator TDC in the spring of 2018, and the unlisted loans it had provided during the year to Scandlines, offshore wind farm Hornsea 1 and other borrowers.In terms of its overall business, PFA reported a poor result for its health and accident insurance operations, which had been hit by more claims and less policy reactivation than expected. This business area made a DKK830m loss, deeper than the DKK427m loss registered in 2017.However, PFA saw a “very satisfactory” influx of new customers overall last year, bringing in 526 new corporate customers and more than 50,000 individual customers.The company made net profit of DKK114m for 2018, down from DKK247m in 2017.Total payments in rose to DKK37.4bn, compared to DKK341bn the year before.Total assets dropped to DKK575.8bn for the holding company at the end of 2018, from DKK596.3bn a year before. Challenging years were inevitable, he said, and it was important to remember that pensions were a long-term investment.
GIC, Singapore’s sovereign wealth fund (SWF), along with PGIM, the global investment management arm of Prudential Financial, have created a framework that links top-down asset allocation with bottom-up private asset investing.The platform is aimed at supporting investors that are increasingly faced with the difficult choice between potentially higher portfolio returns and greater liquidity, under the strains of the current market volatility.In a joint paper, the duo said investors seeking higher returns and better portfolio diversification have been increasing their allocations to private assets.However, GIC and PGIM said that as this allocation increases, the liquidity characteristics of investors’ portfolios change, and this shift comes at “the cost of decreasing portfolio liquidity”. In the short term, some asset owners may be unable to meet immediate portfolio liquidity demands, they added.“By measuring the potential tradeoff between asset allocations, total portfolio performance and the frequency of certain liquidity events with different severities, this framework can help investors quantify the interaction between their portfolio structure and performance, and formalise their decision-making around portfolio liquidity choices,” the paper stated.For asset allocators, liquidity risk is one of the most critical, but least quantified risk dimensions in portfolio construction, it added.Unlike fluctuations in returns, which tend to have a transitory impact, liquidity can be a matter of survival.“Even investors without explicit obligations (eg, some SWFs) may have critical liquidity needs – such as rebalancing the portfolio to manage risk, or having enough dry powder to provide support during periods of market dislocation.”Many institutional investors often model cashflow with illiquid private assets on a deal-by-deal basis, or at the aggregated strategy/vintage level, the paper continued, while portfolio construction is conducted by the team responsible for top-down asset allocation.“The limitation of such an arrangement is that portfolio asset allocation decisions often do not consider bottom-up cash flow information and, likewise, the deal teams usually do not formulate their commitment strategies in a total portfolio context.”Managing illiquiditySorca Kelly-Scholte, managing director and head of EMEA pensions solutions & advisory at JP Morgan Asset Management, said the GIC/PGIM report sets out a useful framework to help investors assess and manage private market illiquidity.“The analysis appears to focus on private equity, in particular using PME (public market equivalent) measures and focussing on drawdown of commitments and return of capital to investors,” she said.“It could usefully be extended to real assets, and in particular to income-oriented and open-ended structures – where the bulk of the return derives from income that forms a stable source of ongoing cashflow and liquidity to investors,” she continued, adding that this could be a particularly useful source of stability during periods of market crisis.“Private equity is less likely to return cash and potentially more likely to call on commitments, and liquid assets can see rapid falls in value, presenting a risk of forced fire-sales,” she said.Padraig Brown, Mercer’s head of real estate – Pacific, told IPE that COVID-19 showed diversification of assets to be essential.Some investments that outperformed in the global financial crisis (eg, shopping centres) have borne the brunt of government-enforced social distancing measures in the current crisis, he said.Brown noted that most real assets have strong cash generation characteristics. “Cash is gold in a liquidity crisis, and retaining distributions from real assets allows portfolios to meet commitment calls, cure breaches of banking covenants and take advantage of distressed pricing.”
114 Virginia Ave, Hawthorne, QLD. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 1:17Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -1:17 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD432p432p360p360p216p216pAutoA, 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 Rate1xFullscreenWhat does a million dollars buy in Aussie capital cities?01:17A RETIRED couple have walked away with a record price in Brisbane’s east after selling the family home site to make way for 32 new houses.The massive 1.97Ha site of their family home sits in the middle of Wakerley, about 16km to the east of the Brisbane CBD — a popular area with families that’s been targeted for major subdivision work. Property records released last week show a $7.5m deal was struck off market in late March, while just two years ago, the site was valued around $1.1m. It’s believed the property was bought for $145,000 in 1987. FORMER ORIGIN STAR STILL KICKING GOALS IN 2018 RAFTER COUNTRY: HOW PROPERTY FULFILLED A CHAMPION FAMILY GET THE COURIER-MAIL’S REAL ESTATE NEWS FREE & DIRECT TO INBOX Preparation for the development approval began last year, with the couple then selling to a firm that then filed a development application to split the site into 27 housing lots in the first stage and five lots in the second stage. 114 Virginia Ave, Hawthorne, QLD.The previous highest price fetched in Brisbane’s east was at 114 Virginia Avenue, Hawthorne — an ultra-modern six bedroom, five bathroom, six car space home that sold for $7.48m in six years ago.Built in 2008, the Viriginia Avenue home has solid concrete walls and floors over all levels, with full walls of glass fronting the river. FOLLOW SOPHIE FOSTER ON FACEBOOK The new subdivision is expected to connect other streets in the area surrounding it. Picture: CoreLogicThe large “rural” home site was surrounded by residential subdivisions on three sides and fronts Manly Road — one of the main feeder streets to the area. The new plans mean it will join seamless into the other subdivisions in the area. MARGOT ROBBIE’S SECRET WEDDING ESTATE FOR SALE More from newsParks and wildlife the new lust-haves post coronavirus18 hours agoNoosa’s best beachfront penthouse is about to hit the market18 hours ago NRL TITANS OWNERS MADE MILLIONS SELLING NSW PROPERTY The company that bought the site received development approval from the Brisbane City Council in May and waived the appeal period.
The apartment at 68/54 Vernon Tce, Teneriffe, sold under the hammer.IT MAY have been tempting to skip the auctions in lieu of the beach with yesterday’s balmy temperatures, but dedicated bidders still rocked up to battle for their dream properties.About 20 people watched on yesterday as two bidders fought it out for one of Teneriffe’s historic and highly sought after Winchcombe Carson Woolstores apartments. In the western suburbs, 42 Rockbourne Tce, Paddington, sold for $1.055m.Place Estate Agents New Farm lead agent Alex Rutherford also said a two-level, three bedroom home at 42 Rockbourne Tce, Paddington, went under contract for $1,055,000.Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 6:36Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -6:36 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD432p432p270p270p180p180pAutoA, 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 Rate1xFullscreenJuly 20: Liz Tilley talks dream homes06:36 The house at 10 Bigi St, Chermside, sold for $547,500.Further north, Harcourts Chermside principal Nick Thornton said a four-bedroom house at 10 Bigi St, Chermside West sold for $547,500. Inside the home at 75 Longlands St, East Brisbane.Four of the five registered bidders took part in the action before the auction was paused at $780,000 before consultation was undertaken with the vendors.The residence was put on the market at $780,000 and two of the bidders continued to fight it out until reaching the final sale price of $845,000.The other property was a block of flats on 810sq m at 40 Barker St, which sold to investors for $1,135,000. The historic residence has exposed brick walls.Belle Property New Farm personal assistant to Richard Barlow, Jordan Lam, said many of the spectators were other owners from within the building and that bidding started at $680,000.“Between the first and final bid, it started rising at $20,000 increments and then went down to $5,000 increments,” Mr Lam said.“(Bidding) was very strategic, everyone was being very smart about it.” The home at 75 Longlands St sold at a fast paced auction.In East Brisbane two properties sold in unrelated, according to Ray White East Brisbane’s Madi Roche.Bidding for a four-bedroom cottage at 75 Longlands St started at $600,000. The living space at 68/54 Vernon Tce, Teneriffe, is open-plan.More from newsNew apartments released at idyllic retirement community Samford Grove Presented by Parks and wildlife the new lust-haves post coronavirus17 hours agoNegotiations saw the property at 68/54 Vernon Tce sell under the hammer for $787,500 to a buyers agent on behalf of a young couple from Adelaide.