The Greek crisis will be a turning point for Europe, but it is for political leaders and not the ECB to decide in which direction, argues Joseph MariathasanWhen politics becomes theatre, the messenger can overshadow the message. The antics of former Greek finance minister Yanis Varoufakis always seemed more about improving his personal profile – perhaps with an eye to a lucrative post-government career on the lecture circuit – than a serious attempt to negotiate with hard-headed politicians constrained by the anxieties of their own domestic electorates.The referendum was pure theatre. My Greek friends tell me one needed a doctorate in economics to understand what the question meant, let alone decide how to vote in the best interests of the country.What the resounding No vote actually means is unclear, as the majority of the Greek population appear to want to remain in the European Union and the euro-zone, despite foreign politicians’ proclaiming beforehand that it would represent a decision to leave both. Greek prime minister Alexis Tsipras has at least showed a willingness to enter into a new set of negotiations by getting rid of Varoufakis, who proudly proclaims in his blog that he “shall wear the creditors’ loathing with pride”. Greece would have found it nigh on impossible to conduct further negotiations with Varoufakis still at the helm.But we come to bury Varafoukis, or at least his career as a minister, and not to praise him. The evil men do lives after them; the good is oft interred with their bones. So let it be with Varafoukis.The disappointment of his brief career as finance minister was that many of his points were valid. As he argues in his blog, the existing Greek ‘bailouts’ were exercises whose “purpose was to intentionally transfer private losses onto the shoulders of the weakest Greeks, before being transferred to other European taxpayers” (sic), although he fails to add that this was driven by panic at the prospect of the collapse of a number of Northern European banks, which could have led to untold consequences for Europe as a whole. Because he adopted a confrontational style to the point of absurd theatrics, he has been dismissed – along with his colleagues in Syriza – as a populist politician out of his depth.As we wait to see what the future holds, it is worth remembering that, although a strong case can be made that Greece would be better off outside the euro while remaining within the political umbrella of the EU, the euro-zone itself might be unable to take the risk of a Grexit.The Hotel Euro-zone is only programmed to receive. You can check out any time you like, but you can never leave. Or else the edifice would collapse. The biggest loser of that would be Germany, with exports collapsing as its currency appreciates against those of its European peers. And the collapse would hit not only Germany’s European markets – Chinese consumers might find that Ferraris have just as much status as Porches but are suddenly more affordable.The problem for the EU and the euro-zone is that developing a rigid economic construct with a half-baked political construct will always be unstable. As Varoufakis points out, the International Monetary Fund itself recently released a report confirming Greek public debt was unsustainable. It is time European politicians recognised this fact.Whatever happens, the country must remain in the EU. The political consequences of Greece’s exit would be unfathomable, but the consequences for the rest of Europe of the country’s turning elsewhere for succour would not be pleasant either.A series of crises – which have provided opportunities for ever-closer union, even if not always welcomed by many of the participants – has driven the European project. The Greek crisis might prove to be a turning point, but it is for Europe’s political leaders and not the ECB to decide in which way.Joseph Mariathasan is a contributing editor at IPE
Overall, Wyss praised the Ständerat for taking its time, building the requisite expertise on the subject and making decisions with “little political bias”.He warned, however, that this might change in the second chamber, the Nationalrat, which he described as being “much more politically motivated”.He also predicted that demands for reform amendments would “differ immensely” depending on political affiliation.The Nationalrat will discuss the Ständerat proposal during its winter session at the earliest – i.e. after the Swiss general elections in mid-October.Wyss said the current proposal was a “very good basis for discussion” for the MPs.The Swiss pension fund association ASIP also welcomed the Ständerat paper, particularly the proposed reduction of the conversion rate to 6% and the inclusion of the new joint statutory retirement age of 65 for men and women.It said changes made to the first-pillar AHV could “serve as good basis for a compromise” and pass a public referendum.But Wyss said the Ständerat’s decision to extend payout from the first pillar while only ensuring the necessary financing until 2030 via a further VAT increase was “problematic”.“This would mean that, shortly after the AV2020 package is passed, a new reform package becomes necessary to ensure financial stability in the first pillar,” he said.He said he was also concerned about the transition period between the old regulations and the new ones, as Pensionskassen will be required to do “complex triple-shadow accounting”. Switzerland’s wide-ranging pensions reform package, entitled Altersvorsorge 2020, has taken another step to fruition after the smaller chamber of Parliament, the Ständerat, considered the government’s reform proposal in detail.The Ständerat made a number of changes, most notably the re-introduction of the existing minimum-wage level, above which people will be able to participate in a Pensionskasse.Stephan Wyss – managing partner at new consultancy Prevanto, created through a friendly MBO at Swisscanto last month – said: “The government proposal of covering more employees under the second pillar would have cost too much money and with it probably many jobs.”Additionally, companies will have to pay into occupational Pensionskassen for workers from the age of 21 rather than 25, should the package go through the next chamber and the subsequent public referendum in its current form.
Since then plans have been rationalised, prioritising urgent adjustments as well as cost-reducing elements, according to MN.It said that the dedicated project organisation, comprising 100 MN staff and 75 external specialists, had been abolished, and that the slimmed down project was to continue as “pensions innovation”.The provider – which also serves the sector scheme for the merchant navy – argued that the MN 3.0 team had tried too many things at once and hadn’t worked efficiently.A €20m investment during the past three years delivered several new systems, such as an automatic link with the citizens register of local councils, a new employer portal, and an update of existing files.MN already reported a €13.8m loss over 2015, which it largely attributed to MN 3.0.It made clear that its pension fund clients would have to foot the bill with, for example, PMT having to pay an additional €16 and €17 per participant over 2016 and 2017, respectively, on top of regular implementation costs of €81.50.MN’s options were renewing the IT core or investing in an entirely new system, the provider said.It added that it would prioritise the planning for a new employer portal and new hardware.At the start of MN 3.0, the entire costs for the five-year project had been estimated at €70m.MN expected to shed 220 jobs as a result of the project. The number of staff has been reduced by 120, equating to almost 10% of the initial number.A spokesman for MN said it could still make up for the delay. MN, the asset manager for Dutch metal industry pension schemes PMT and PME, has written off €15m of a €70m innovation project, which has largely failed to deliver.In an interview with IPE’s sister publication Pensioen Pro, it indicated that the project – known as MN 3.0 – was “over-ambitious” and has been drastically scaled back.MN 3.0 was meant to reduce costs by 30% by 2018 and decrease the number of administrative errors caused by manual handling at the €114bn asset manager.The project – started in 2014 – was already temporarily halted last year as its planned core IT system, including the administration for pension rights and a database for pension plans, “didn’t inspire confidence” for the future, the group said.
Henriksen said equity market drivers had now changed: while low interest rates and share repurchases had supported shares for several years after the financial crisis, business growth was now also increasing and shoring up the stock market’s valuation.Henriksen predicted that this pattern could continue, arguing that the European economy had finally caught up with the pace of that of the US. Growth in Europe was higher in the first half of this year than it was across the Atlantic.“There is a basis for the positive development to continue,” he said. “Confidence in households and businesses is at the highest level since the financial crisis, and for the first time since 2010, we have global dynamics where rising employment is positively impacting on consumption and housing markets, and it gives businesses more appetite to invest.”Inflationary pressures were still lower than the central banks’ target, he added, which meant that monetary policy would continue easing in the near future.But there were also risks, he said: “Debt is high in Western economies, China’s growth model is largely debt-bearing, and central banks in the US and Europe will gradually make monetary policy less easy.”The US Federal Reserve has indicated plans to run down its stock of US Treasuries, bought through its quantitative easing programme, from later this year. Denmark’s largest commercial pension fund expects equity prices to remain underpinned by the global economic recovery for the rest of this year.Henrik Henriksen, chief strategist at PFA, which manages assets of around DKK600bn (€80.5bn), described 2017 as a turning point for companies around the world.He said: “The US recovery is in the mature phase, and US stocks are priced at high levels, but our main scenario is that the global recovery will continue to support the shares in 2017.”Earnings had risen in all regions for the first time since 2010, the pension fund said. In combination with a simultaneous recovery of economic activity in both developed and emerging economies, this was positive for stock market developments, PFA said.
The Netherlands’ communication watchdog Autoriteit Financiële Markten (AFM) is to transfer its pension arrangements to the general pension fund De Nationale APF.As of 1 January 2018, the pensions of the approximately 1,000 participants and pensioners will be housed with the new pensions vehicle, established by asset manager NN Investment Partners and pensions administrator AZL.The pension fund is to bring in €185m of assets to De Nationale, with the assets being kept in a dedicated compartment for the AFM with its individual policy as well as ring-fenced assets.The regulator said it had opted for De Nationale APF following a tender under EU rules. One of the criteria was that its current pension plan would remain largely unchanged, and that its accrued pension rights would also be managed by the general pension fund. According to the sponsor, joining De Nationale APF would not only mean lower costs, but also a more solid pensions provision.The AFM’s pension fund is to be liquidated once the transfer to De Nationale APF is complete.Currently, Blue Sky Group carries out the scheme’s administration, while BlackRock manages its assets.In 2014, the AFM established its own pension fund, following the break up of Mercurius Amsterdam, a pension fund for the financial sector, which previously managed the AFM’s pensions.However, in 2015, the AFM scheme reported high costs relative to other pension funds in the Netherlands: €734 per participant for administration and 0.88% for asset management.An effort to set up a joint general pension fund with fellow supervisor DNB was abandoned after DNB concluded that it saw no need for such a co-operation for the time being.Recently, SPUN, the Dutch pension fund of IT firm Unisys, announced that it would join De Nationale APF.Earlier, AZL placed its own pensions with the general scheme, as did the Dutch pension fund of chips producer McCain.Including the AFM pensions, De Nationale APF is to manage approximately €935m of pension assets in total.Kempen to open Paris officeAsset manager Kempen Capital Management has announced that it will open an office in Paris.It said this was a logical step given the increasing number of institutional clients in France, including pension scheme Fonds de Réserve pour les Retraites (FRR).Vuk Srdanovic, international business development manager for the French market, said that French institutional investors had shown a strong interest in Kempen’s niche strategies during the past years.“Our local presence in Paris would allow us to extend our current relationships as well as attract new clients,” Srdanovic added.Lars Dijkstra, Kempen’s chief investment officer, said France had been an important market for Kempen for years.Currently, Kempen has offices in Amsterdam, London and Edinburgh.Kempen offers fiduciary management for pension funds, insurers and the low-cost Dutch defined contribution vehicle PPI, as well as other asset management services to institutional investors.
Wouter Koolmees, the Netherlands’ minister for social affairs, has again rejected the idea of a flexible retirement age for the country’s state pension (AOW).Answering questions posed by Corrie van Brenk, MP for the party for the elderly (50Plus), Koolmees argued that it would be bad for the state’s finances, while implementation would be “very complicated”.Van Brenk referred to a study by researcher Sander Muns, which concluded that a flexible AOW age could help workers in physically demanding jobs with a small occupational pension to retire early. His findings ran contrary to a survey, carried out by economic research institute SEO – affiliated with Amsterdam University – and commissioned by the government in 2017. However, Muns based his survey on the assumption of a lower benefits discount for early retirement, as well as a lower social minimum income level. This would ensure that the income of workers taking early retirement would not drop below the social minimum.However, in Koolmees’ opinion, this would put people off taking early retirement, as the SEO study had suggested that they didn’t want to end up at the social minimum level.He added that most employees had sufficient occupational pension rights to cease working early without ending up below the social minimum.“Therefore, the added value of a flexible AOW remains very limited,” he argued. An additional disadvantage of a flexible retirement age, Koolmees said, was that it would place a duty of care on the government “to prevent elderly [people] falling into poverty for the long term”.A flexible retirement age for the AOW is one of the conditions that Dutch unions have set in order to persuade them to return to the negotiating table for wider pensions reform.
The Work and Pensions Select Committee wants a review of the charging structure of auto-enrolment schemesThe Work and Pensions Select Committee’s report touched on several other aspects of pensions and investment reforms including the proposed pension dashboard, the auto-enrolment charge cap, pension tax relief, and the FCA’s work on scams.Since auto-enrolment was introduced in 2012, any defined contribution pension fund automatically enrolling staff has been subject to a maximum charge of 0.75%.While most schemes charge below this level, the committee called for the Department for Work and Pensions (DWP) to review the cap and its implementation, arguing that “not all charges are covered by the cap”, and those that fell outside were not fully understood.The committee said the DWP should “consider preventing flat-fee charging structures” for “dormant” pension pots, as these could be completely eroded by such charges. In addition, the department should “revisit measures to proactively consolidate smaller pots”.The committee’s full report is available here. Asset managers should be forced by law to comply with new cost disclosure templates, according to politicians in the UK’s lower house of parliament.In a wide-ranging report published this morning, the Work and Pensions Select Committee said it was “not convinced” that the current voluntary regime – with a threat of legislation at a later date – would “provide sufficient incentive to achieve a high take-up” of the disclosure code.The Cost Transparency Initiative (CTI) was launched last year following months of work by pension funds, asset managers, trade bodies and regulators to formulate standardised templates for the reporting of fund management, trading and administration charges.It is already supported by the Local Government Pension Scheme – which has roughly £347bn (€377.6bn) in assets under management across 100 local authority funds – the Investment Association and the Pensions and Lifetime Savings Association (PLSA). Source: UK ParliamentFrank FieldFrank Field, chair of the committee, said: “Government and regulators should not wait for the industry to fail to act voluntarily as they have so many times in the past. It must put the full force of the law behind such changes.”The committee’s report stated: “We recommend that the government bring forward legislation to make the disclosure templates mandatory for both defined contribution and defined benefit schemes.“We recommend that, to avoid poor quality and untimely data, the disclosure templates are supported by an independent verification process. Compliance should be overseen by the relevant regulators, who should be given any additional powers they might need to tackle non-compliance.“We recommend that schemes should be supported to collect additional information if the template does not fully cover their individual scheme needs. This information should be available for scheme members as part of the wider information provided on value for money including information on exit charges and any other costs associated with transfer of their pot.“The FCA [Financial Conduct Authority] should explore the creation of a public register of asset managers’ compliance records with reasonable data requests.”CTI expresses disappointment Mel Duffield, chair of the CTI and pensions strategy executive at the Universities Superannuation Scheme, expressed disappointment that the report, while supportive of the CTI’s templates, “fails to recognise the strong engagement between industry, regulators and government in adopting the work”.“Just two months after the launch of the templates, the level of detail in the technical queries the CTI has been receiving from investment managers demonstrates the already high level of engagement and take-up by industry,” Duffield said.“The FCA, [the Pensions Regulator] and government ministers have all provided welcome drive and direction, sending very clear messages to the industry about their expectations. We are confident this will help to ensure the success of the CTI.”Nigel Peaple, director of policy and research at the PLSA, added that the templates had been downloaded “thousands of times” from the organisation’s website, and that it had “fielded hundreds of technical queries” about implementing the measures.Report targets transparency The committee’s report acknowledged that there was not a “perfect one-size-fits-all model” for disclosure, but still urged the government to act.
The AWH Group Pension Scheme, the pension fund for employees of the UK textile company AW Hainsworth, has completed a £2.3m (€2.7m) bulk annuity transaction, insured through Aviva.The deal was advised on by K3 Advisory along with H&C Consulting Actuaries.Jamie Cole, deal management lead at Aviva DB Solutions, said: “We’ve worked closely with the advisers to deliver this transaction.“Their focus on running an efficient process has helped secure this buyout, demonstrating the market is open for well-prepared small schemes.” Adam Davis, managing director at K3 Advisory, added: “The buyout market for small schemes is growing exponentially and K3’s unique approach is now helping such schemes stand out to insurers, helping secure them deals that otherwise may not be available to them.”The company, which is responsible for manufacturing ceremonial uniforms worn by the British Royal Family during state occasions and the military uniforms worn during the Charge of the Light Brigade, was established in 1783.
2227-2228 The Masters Enclave, Sanctuary Cove.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 ago“He spent a lot of time in the office and on the phone — he was involved in lots of charities too,” Mr Gibbs said.The home sits on an almost 2500sq m block and also has a pool, media room and water features.It is hidden in a quiet street surrounded by the trees and lush grass of the golf course.Mr Gibbs said they wanted to find a buyer that would appreciate the home for what it was.“Mum and dad loved it,” he said.“Hopefully someone grabs it and loves it as much as they did.” 2227-2228 The Masters Enclave, Sanctuary Cove.Their son, Andrew, said while the home held a special place in the Gibbs family, it was much too big for his mother.He said his parent’s built it with entertaining in mind.“They’ve always had a lot of people around for dinner so it was always about that,” Mr Gibbs said.It was also important for his father to have a large study. 2227-2228 The Masters Enclave, Sanctuary Cove. 2227-2228 The Masters Enclave, Sanctuary Cove. Address: 2227-2228 The Masters Enclave, Sanctuary Cove Agent: Jordan Williams, Kollosche Prestige Agents Price: $3.495 million Inspections: By appointment 2227-2228 The Masters Enclave, Sanctuary Cove.THE sophisticated grandeur of this modern mansion is bound to leave guests in awe.High ceilings with what appears to be endless windows add to the scale of the Sanctuary Cove home while neutral tones and wood finishes give it a modern edge. It was built almost a decade ago by former Queensland politician, the late Ivan Gibbs, and his wife, Doris.
Stockland residential development Queensland general manager David Laner.STOCKLAND North Shore is easing affordability woes as they launch their Spring Sale Campaign.During the month of October buyers will receive $10,0000 off land lots as part of the campaign.More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020Stockland Residential Development Queensland general manager David Liner said Spring was usually a busy time at North Shore and it was hoped the $10,000 boost would help more people be able to afford a new home.“Seasonally in Queensland and in Townsville spring is when new listings come on to the market and interest in property rises and that’s is certainly reflected at North Shore,” he said.“$10,000 off for someone like a first homebuyer who has worked hard to put together a deposit is compelling enough for them to think ‘we can do this’ and go from renting to buying their own home.“The Queensland Government First Home Buyesr Grant is also on offer while some of our high quality builder partner have offers running as well.“We’ve already had high interest on a number of blocks.” For more information visit www.stockland.com.au/residential/qld/north-shore.