Month: September 2020

​An Post, Ontario Teachers finalise €400m deal for Irish lottery

first_imgThe An Post Superannuation Scheme, one of Ireland’s largest, has finalised a deal that will see it team up with a Canadian pension fund to run the country’s national lottery.A consortium, also consisting of the CAD130bn (€80.6bn) Ontario Teachers’ Pension Plan and An Post itself, was first named as the preferred applicant for the 20-year licence last October, with the Irish government initially hoping the €405m agreement would be signed by the end of the year.The minister for public expenditure and reform, Brendan Howlin, said he was “very pleased” with the outcome of the tender, which brought together “valuable domestic experience” and the international expertise of OTPP.Howlin, a Labour TD, added: “Premier Lotteries will grow the business in a responsible manner, and we can look forward to a greater annual revenue stream for Good Causes.” An Post previously oversaw the operation of the Irish National Lottery, while OTPP acquired the operator behind Britain’s national lottery provider, Camelot Group, in 2010.The consortium, joint owners of the lottery’s new management company Premier Lotteries Ireland (PLI), said it expected to pay the first half of the €405m licence fee to the government in the coming days.Details of the exact ownership structure of the company are unclear, with a statement by OTPP only noting that An Post and its underfunded pension funds held minority stakes.The government confirmed the second tranche of the licence fee would be due for payment before the end of the current calendar year.Lee Sienna, vice-president of long-term equities at OTPP and chairman of PLI, said he would be working with his Irish partners to grow sales.He added: “The Irish licence is a significant milestone in our strategy of building a leadership position in the international lottery sector.”Dermot Griffin, the chief executive designate for Premier Lotteries, meanwhile emphasised that a growth in sales would allow an increase in funding for charitable causes, as 65% of gross revenue is earmarked for such purposes.last_img read more

Over-regulation ‘crushing’ trustees, Swiss pension industry warns

first_imgThe Swiss pensions industry has rejected a recent call for the OAK, the country’s regulator, to introduce new benchmarks and binding guidelines, saying that participants could do more to work together to reduce over-regulation.Speaking at the pension conference Fachmesse 2. Säule in Zurich, Pierre Triponez, director at the OAK, said: “We can all do our share in ensuring regulation is less complex.”He called on audience members, mostly were pension fund delegates, to “help by being transparent and ensuring there are no new scandals – otherwise, the politicians will ask for new rules”.Fear of overregulation and its impact on members of trustee boards, or Stiftungsräte, was debated on various panels at the conference, hosted biannually by Swiss publishing group VPS. And while Zurich’s top supervisor, Roger Tischhauser, recently called on the OAK to introduce new benchmarks and binding guidelines, the industry itself believes it can do with a little less regulation.Patrick Zahno, chartered accountant at OBT and a member of two trustee boards, said he would like to see a commitment to “less regulation” as part of the Altersvorsorge 2020 reform package.Sergio Campigotto, board member at the Migros Pensionskasse and a trustee at the collective investment foundation (Anlagestiftung) Testina, agreed there was “a danger of over-administration, which is limiting room for manoeuvering”.Matthias Kuert Killer, head of social politics at the Swiss federation of workers’ associations Travail Suisse, called on regulators not to “burden trustees with more and more responsibility” while failing to take into account the information gap they have, compared with the pension fund experts consulting them.But René Steffen, pension fund consultant at the collective scheme PREVAS, said he was convinced trustees did not have to “know everything” – “they just have to ask the right questions”.And out of those, there are sometimes too few who would like trustees to be a “bit more persistent and ask more questions” when external service providers are presenting solutions, according to Roland Schmid, chief executive at Swiss Life Pensions Services.None of the industry representatives wanted to abandon the system of having both employers and employees send lay trustees to the boards of pension funds.“Trustee boards can continue to operate as they do,” Campigotto said, “but people have to become more aware of what they are getting themselves into.”And trustees, he added, need to be given the time to prepare for meetings and decisions.Schmid pointed out that there were currently more than 500 different legal paragraphs concerning pension funds, and that trustees had to think about future problems and decide what to do themselves and what to outsource.Steffen stressed the importance of having lay trustees on boards, as it “creates trust” when employees know at least one member in a Stiftungsrat personally.“At the moment,” he said, “this is still reality, but, with the consolidation of pension funds and the trend towards more large collective schemes, this reality is disappearing.”For more on consolidation in the Swiss second pillar, see the June edition of IPE magazinelast_img read more

Pension funds need state support for green investment, PensionDanmark says

first_imgPensionDanmark provides labour-market pensions, and currently manages assets of around DKK152bn (€20.4bn).Möger Pedersen and PensionDanmark are attending the summit in New York as part of the Finance Track to the UN Secretary-General’s Climate Summit – an advisory group focused on financing.A spokeswoman for the pension fund said Pedersen would be addressing the importance of Danish pension funds – and Denmark – considering climate change in what they do.Möger Pedersen noted the Climate Change Act, recently passed by the Danish Parliament, included the aim of moving Denmark to 100% renewable energy sources by 2050.He said Danish pension funds and others in the financial sector had been increasingly active in both direct and indirect investments in renewable energy and grid infrastructure domestically, as well as in other developed countries.“These are investments that fit well with the long-term nature of pension funds, and the market for these types of investments has been maturing rapidly in recent years, with a sharp rise in deals and deal flows and has, thus, been attracting an increasing number of more mainstream investors,” he said.He said development finance institutions (DFIs), regional development banks, multinational development banks, governments and institutional investors had already been working to find “competitive risk/return profiles” that attracted private sector capital to invest in renewable energy and energy infrastructure in developing countries.A recent example, he said, was the Danish Climate Investment Fund set up earlier this year, under which the Danish government, Denmark’s Investment Fund for Developing Countries (IFU) and several institutional investors, including PensionDanmark, had worked together.The fund is to invest in renewable energy, energy efficiency, transportation and other projects, with a geographical scope covering nearly all countries in Africa and Latin America, most in Asia and a few in Europe.At the moment, the fund has commitments of DKK1.3bn, but Möger Pedersen explained that, since it only contributes part of the financing for individual projects – with further money coming from other public and private investors such as Danish partners, local banks and funds – the total investment could be six times as much.“The model used for the Danish Climate Investment Fund is both replicable and scalable,” he said.Möger Pedersen’s intervention came less than a week after more than 340 institutional investors worth $24trn (€18.5trn), including PensionDanmark and more than 30 other European pension investors, called on governments to create a more secure regulatory framework to allow increased levels of investment in the low carbon and renewable energy economy. Pension funds will only be able to invest in renewable energy in developing countries if they have the financial support of the state to mitigate the risks, PensionDanmark’s chief executive Torben Möger Pedersen has said.Speaking on the eve of the UN Climate Summit in New York, Möger Pedersen said: “Expanding these types of investments into developing countries is challenging, due to higher risks, especially when it concerns direct unlisted investments.”He said this was particularly difficult for pension funds that had a fiduciary responsibility to their policyholders to seek the best possible risk-adjusted returns.“Therefore, there is a need for catalysing new public/private partnerships that can bridge that gap, leverage public funds and put in place de-risking instruments that can make the investments feasible for pension funds,” he said.last_img read more

Sweden to close AP6 buffer fund, consolidate unlisted assets into AP2

first_imgBolund, a Green MP within the left-leaning coalition government, said it was “encouraging” that there was now a broad political consensus around the restructuring of the system – which currently comprises AP1-4 and AP6 – following discussion of the proposals among the six political parties that comprise Pensionsgruppen.In line with the previous report by Langensjö, the government confirmed the end of the current quantitative investment guidelines and a shift to a prudent person principle.A new Pension Reserve Board will also be granted ownership of the assets.AP6, based in Gothenburg alongside AP2, and one of the three AP funds based in Stockholm will be closed.A decision on which fund that is will be reached at a later date.While the inquiry headed by Langensjö came out in favour of a single buffer fund, the government at the time preferred the retention of at least three funds. The system will be renamed to ensure the remaining funds are named AP1-3.The closure of AP6 will see what is currently AP2 take on responsibility for all of the buffer fund’s unlisted assets, and the funds asked to cooperate through a joint investment committee representing the interests of all three remaining funds.Erik Thedéen, at the time state secretary in the Ministry of Finance, told IPE last year that property holdings could be consolidated into a single fund, or that they could launch a single vehicle responsible for unlisted assets.The 400-page consultation document said the government would only regulate how AP2 proceeded if it and the other buffer funds were unable to collaborate.The arrangement would be subject to annual review, likely through the annual AP fund report tabled in Parliament.It added that, unlike a number of large Canadian pension funds, the AP funds should not strive to be sole owners of assets and instead pursue joint ventures, as the concentration of risk would not be an “appropriate” use of buffer fund capital. Sweden is to close AP6 and a second, as yet undecided, buffer fund in an overhaul of the AP fund system that will also see a greater emphasis placed on sustainability.In a move meant to save costs, the government also announced that all of the system’s holdings in unlisted assets were to be pooled and overseen by AP2, which is to absorb AP6.The proposals, published by the Ministry of Finance nearly three years after the conclusion of a review chaired by Mats Langensjö, will also see the strengthening of responsible ownership at the Swedish buffer funds.The suggestion is in line with previous calls from deputy finance minister Per Bolund that the country set a more ambitious agenda for sustainable investment.last_img read more

‘Bolder’ UK actuarial body calls on G20 to deliver on fossil fuel pledge

first_imgThe UK’s Institute and Faculty of Actuaries (IFoA) is calling on G20 governments to follow through on their commitment to phase out fossil fuel subsidies, saying these undermine efforts to mitigate harmful climate change.The actuarial organisation is signing a statement from the Overseas Development Institute (ODI), a UK-based think tank.Nico Aspinall, chair of the IFoA’s resource and environment board, told IPE that the actuarial organisation is signing the ODI statement as part of its ongoing work “to raise awareness of climate change risk and the threat it poses for governments, businesses and individuals”.The IFoA took part in the UN climate change conference in Paris in December 2015 (COP21), he said, and the IFoA is involved in the ODI’s call to action “because it aligns with our work on investment risk owing to stranded assets”. He added: “Resource and environment issues are a key policy priority for the IFoA and we believe this statement, if implemented, will have a major impact on policy.”The ODI is due to publish its statement next week in advance of the G20 Leaders Summit in Hangzhou, China in early September, a spokesperson told IPE.According to the IFoA, the statement asks the G20 governments to implement their long-standing commitment to phase out fossil fuel subsidies and to set a timeframe for this of 2020.The IFoA said: “As experts in long-term risk management the IFoA believes that climate risk is one of the greatest risks facing current and future generations.”Aspinall said: “State fossil fuel subsidies form a key structural inhibition of competition and act as a barrier to investment in renewables on the scale needed to deliver carbon commitments made in Paris.”The G20 pledged to phase out fossil fuel subsidies in 2009, but have yet to do so.In a communiqué issued after their April 2016 meeting in Washington D.C., the G20 finance ministers and central bank governors said: “We reaffirm our commitment to rationalize and phase-out inefficient fossil fuel subsidies that encourage wasteful consumption, over the medium term, recognizing the need to support the poor.“Further, we encourage all G20 countries to consider participation in the voluntary peer review of inefficient fossil fuel subsidies that encourage wasteful consumption.”The ODI, and the backers of its forthcoming statement, would not be the first to call on the G20 to deliver on their pledge.In November 2014 US economists Jeffrey Sachs and Nouriel Roubini called on the G20 leaders to cut subsidies, saying that this would dry up investment in fossil fuel exploration and help create conditions for a low carbon energy transition.The G7 have agreed that fossil fuel subsidies should be phased out by 2025.The move by the IFoA l comes after it launched a “refreshed” strategy in June this year, doing so “not just to reflect the changes in the global landscape today, but to position us and our members as relevant for an uncertain future”.The IFoA said the tweaked strategy also includes plans “for bolder public affairs activity” and a spokesperson for the body confirmed that its move to sign the ODI statement is an example of this type of activity.last_img read more

MPs to consider indexation changes as ‘one of various’ options in DB inquiry

first_imgAllowing schemes to suspend inflation-linked pension increases is one of the options the UK parliamentary Work and Pensions select committee would consider as part of its broad inquiry into defined benefit (DB) pensions, according to a spokesman.He was confirming reporting by the Financial Times, which interviewed the committee chair, Frank Field.It reported Field as saying that the committee would look at what was needed to “help create a climate of opinion so scheme trustees would naturally think about introducing flexibility on benefits”, mainly on inflation-matching increases.The spokesman for the committee confirmed that suspending inflation-linked increases was “something it would look at” but said it would be compared with “various other options” and that it was “still far from being anywhere near a formal recommendation by the committee”. He said the committee was about halfway through the process of going through written evidence but had yet to begin oral evidence sessions, which were of “quite high” importance.In August, the work and pensions committee announced that it was expanding its inquiry into the Pension Protection Fund and pension regulation, which spanned the collapse of UK high street retailer BHS, to focus on DB pension schemes more broadly.The scope of the inquiry is large, with the committee having invited written submissions on aspects such as the relationships between The Pensions Regulator (TPR), the Pension Protection Fund, trustees and sponsoring employers, and “the balance between meeting pension obligations and ensuring the ongoing viability of sponsoring employers”.The deadline for written submissions closed just over a week ago, with the oral evidence sessions due to start towards the middle of this month.These are scheduled to last until around the end of November.The committee would then consider this evidence in December, with a view to publishing a report with its recommendations in January, according to the committee spokesman. The committee’s inquiry both reflects and is part of an intense debate about the viability of the DB system in the UK in light of high deficits, although these, or at least their interpretation, are also contested.last_img read more

Heathrow lands £325m buy-in with L&G through bespoke bond deal

first_imgHeathrow is the UK’s busiest airportThe buy-in covers 1,300 pensioner members of the BAA Pension Scheme, which was closed to new members in 2008.“Genuine collaboration and innovation can truly generate value to all parties,” said Phil Wilbraham, chair of the trustee board.“I am delighted with the completion of this innovative transaction with Legal & General, which at the same time de-risks the position of our scheme members, enables Heathrow to strengthen their financing position ahead of our airport expansion and provide access to competitive financing for the benefit of passenger and airline customers.”Although the two companies did not disclose what the bond would finance, the UK’s transport minister Chris Grayling recently announced government support for a third runway at the Heathrow, the country’s busiest airport. Politicians will vote on the idea in the coming days, according to media reports.In a statement announcing the transaction, L&G described the bond as “a valuable asset” for its asset portfolio backing its pension liabilities.“Legal & General will continue to invest strategically in UK assets and infrastructure to support the pension promises that we take on from companies in the UK,” Mason added. “We look forward to supporting the trustee in future to secure more of their members’ benefits.” Heathrow Airport’s defined benefit pension scheme has secured a £325m (€370.5m) buy-in with Legal & General (L&G), involving an innovative inflation-linked bond arrangement.The company, sponsor of the BAA Pension Scheme, has issued a £160m inflation-linked bond directly to the insurer as part of the transaction.The bond enabled the trustees of the £4bn scheme to secure a lower price for the buy-in, as its 40-year duration and inflation link fitted with the liabilities transferred to L&G. The bond also switches between the UK’s two main measures of inflation, RPI and CPI, the insurer said.Laura Mason, CEO of L&G Retirement Institutional, said: “This innovative transaction has generated genuine value, allowing Legal & General to deliver an attractive premium to the scheme while enabling Heathrow to achieve the financing it needed. “The transaction highlights our ‘solutions-driven’ approach towards complex client requirements, allowing all parties’ needs to be met.”last_img read more

UK roundup: L&G enters longevity swap market for small schemes

first_imgLongevity insurance has typically been available chiefly to larger schemes. In the past 12 months, Mercer , British Airways and National Grid have sealed multi-billion-pound longevity derisking transactions, while insurance companies PIC , Aviva and Scottish Widows have also offloaded longevity risk attached to their bulk annuity books.This year has been widely predicted to be a record-breaking year for pension risk transfers, including buy-ins, buyouts and longevity swaps.LGPS pool signs PRI codeThe £15.1bn Local Pensions Partnership (LPP) has signed up to the UN’s Principles for Responsible Investment (PRI).LPP – which manages the assets of three Local Government Pension Scheme (LGPS) funds – said the decision reflected a “continued commitment to integrating environmental, social and corporate governance (ESG) considerations” into its investment operations.The company has put in place shareholder voting and responsible investment policies detailing its principles and guidelines for governance and stewardship of assets.Susan Martin, LPP chief executive, said: “Since our inception we have worked closely with our partner funds to help them achieve their ESG investment objectives and this is the natural next step for us.“As we continue to seek the best possible long-term outcomes for our clients and their pensions, we see ESG as an integral part of the investment decision-making process and will continue to develop our focus on the best governance and stewardship practice.”LGPS Central agrees to cost transparency guidelinesLGPS Central, the asset pool for nine UK local authority funds running £44.3bn, has become the latest pooling body to sign up to LGPS’s cost transparency code.It follows fellow asset pools LPP, Brunel Pension Partnership and Border to Coast Pensions Partnership in pledging to comply with the code. Source: Paul Cosmin LGPS Central’s office is in Wolverhampton, EnglandThe cost guidelines were set up by the LGPS’s advisory board and will be updated when new templates are published by the Institutional Disclosure Working Group, an industry body that is drawing up disclosure templates for a range of asset classes.The advisory board’s standard has been adopted across the LGPS for more than a year, and most schemes only hire new managers that are signed up to code.According to the board’s website, 78 asset managers and other service providers have signed up to the code.Andrew Warwick-Thompson, CEO of LGPS Central, said the code “reflects our objective to demonstrate that we are open and transparent in everything that we do, particularly when it concerns investment management costs and fees”.He added that one of the pool’s core objectives was to “demonstrate cost savings on our investment management activities”.“By signing up to the code we know that our partner funds will have full transparency relating to our costs and fees based upon a methodology that we expect to see become industry best practice,” Warwick-Thompson said. “That can only be a positive for everybody involved.”LGPS Central has launched three equity funds since opening for business in April, with £13bn under management. It plans to open at least two more funds later this year. UK insurance giant Legal & General (L&G) has entered the longevity swap market for small pension schemes with a £300m (€334m) transaction.The deal – with an unnamed “mid-tier” UK pension scheme – made use of a “streamlined” derisking structure, L&G said in a press release. The swap was fully reinsured with SCOR, and means the scheme is protected against the risk of its members living longer than expected.Chris DeMarco, managing director for UK pension risk transfer at L&G Retirement Institutional, said: “Smaller pension schemes often feel that the only insurance options they have are traditional buy-in or buyout structures.“This transaction demonstrates that longevity insurance is a realistic option for most pension schemes, including for trustees whose schemes are not quite at the point they can enter into buy-in or buyout but want to manage their longevity risk.”last_img read more

400 investors register on climate action reporting platform

first_imgInstitutional investors are being encouraged to use a new online platform to report climate action they are taking and make new commitments.Nearly 400 investors with $32trn (€27.5trn) in assets under management between them have used The Investor Agenda, which was formally launched in San Francisco yesterday as part of the annual conference of the Principles for Responsible Investment (PRI) and a global climate summit.Developed by seven organisations including the PRI and the Institutional Investors Group on Climate Change (IIGCC), the initiative “seeks over time to reflect the full breadth and scale of global investor-led action on climate change”.It also aims to stimulate greater action by “bringing together and helping drive participation in a broad range of global investor initiatives”. To participate, investors must report the climate actions they have taken or plan to take in one or more of four “focus areas”: investment, corporate engagement, investor disclosure, and policy advocacy.According to the launch announcement, 392 investors had specifically reported new information or committed to policy advocacy activity under The Investor Agenda.Investors who were already involved in related corporate engagement initiatives, such as Climate Action 100+, are counted as active by The Investor Agenda, but are not included in the 392 figure.Patricia Espinosa, executive secretary of the United Nations Framework Convention on Climate Change, said The Investor Agenda “offers a clear path to scale-up investor action”.“It gives investors multiple opportunities to continue to demonstrate their willingness to become part of the transformation that will lead us to a more cleaner, greener, sustainable future for all.”Peter Damgaard Jensen, CEO of DKK275bn (€37bn) Danish pension fund PKA and chair of the IIGCC, said the emergence of the platform reflected “the mounting urgency among the global investor community to address the greatest challenge of our time through measurable and transparent actions”.last_img read more

Renovated Queenslander with jaw-dropping plunge pool

first_imgMore from newsDigital inspection tool proves a property boon for REA website3 Apr 2020The Camira homestead where kids roamed free28 May 2019The main living area is open plan.While the residence, known as ‘Glenbrae’ has had a complete makeover, some of the character elements of the home remain.“We kept character throughout, with brand new VJ walls, keeping fretwork, but we used lots of stone and marble to create tones and textures,” Mrs Hart said. Some of the decorative fretwork was retained.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 This room has a polished concrete floor.She said the home would be suited to a family with both young and teenage children, and is conveniently located.“Taringa is a beautiful area and very tightly held,” she said.“One block away is one of the best cafes around; everything is at your fingertips.” The kitchen is any keen cook’s dream.Out of the home’s five bedrooms and two living spaces, the kitchen is Mrs Hart’s favourite.“There is nobody I know who could fill those cupboards and then there’s a butler’s pantry,” she said.“I like cooking and it really has been positioned so you can see every direction from the kitchen.“You can stand there and watch your kids playing in the pool or cartwheeling around the backyard.”center_img The home at 86 Waverley Rd, Taringa, has been completely renovated.THIS Taringa pad has an incredible pool – and the house isn’t bad either. The plunge pool sits in the back corner of the 86 Waverley Rd block, with a small deck next to it.It is tiled both internally and externally with dark grey ceramics and adds wow factor to the backyard of an even more jaw dropping home. The plunge pool is both stylish, and low maintenance.Nadia Hart and her husband Steve set out to the flip the 1930s Queenslander after purchasing it early last year and have changed everything except for the two bedrooms at the front of the home.“I love heritage homes with history and so forth,” Mrs Hart said.“Other than the first two front rooms, everything has changed (and) we knocked the back off because it wasn’t structurally sound.”last_img read more