The German pension fund association (aba) has criticised the fact an ECON report on Key Information Documents (KID) for investment products – also known as PRIPs regulation – will include occupational pension plans within its scope.In July 2012, the commission published a draft for the PRIPs regulation that excluded all occupational pension schemes.Only a few months later, however, a number of lobby groups vowed to fight the proposal.The ECON Committee of the European Parliament has now put forward an amended draft of the regulation that could include most of the occupational pension vehicles after all – particularly in Germany – according to Klaus Stiefermann, managing director at the aba. He told IPE the new proposal “shocked and surprised” many in the industry, as “nobody thought to track the PRIPS negotiations any further, especially as the EMPL committee (dealing with the occupational pension sector) was not involved”.In the new draft of the proposed regulation, occupational pension schemes and individual pension products are only excluded provided that a “financial contribution from the employer is required by national law and where the employer or employee has no choice as to the pension product or provider”.According to the aba’s interpretation, this would include all German occupational pension plans, as contributions are neither mandatory nor are employers limited in their choice of provider.The ECON report states: “Investment products with the purpose of accumulating savings for individual pensions should remain in scope because they often compete with the other products under this regulation and are distributed in a similar way to the retail investor.”The amended report is to be voted on in two weeks’ time, on 21 November, but the deadline for feedback on the proposal is 13 November.Should the proposal go through without alteration, some pension funds would have to draw up KID similar to the ones given to private investors when buying a retail investment product.German Green MP Sven Giegold – also a founding member of consumer lobby group Finance Watch, which aims to improve the regulation of financial products – is responsible for bringing the amendments forward. While the aba said it was unopposed to additional reporting requirements or member information, it argued that the inclusion of KID-type requirements in the PRIPS regulation “made no sense”. “We are expecting the draft of the IORP II Directive to be published by the end of the year, and this will include additional reporting requirements anyway,” Stiefermann said.He suggested the PRIPs Regulation and the IORP II Directive might ultimately be considered incompatible and even “collide”, and questioned whether all members of the ECON Committee who voted in favour of the changes had been fully aware of their scope.For more on Key Investor Documents, see the Letter from Brussels column in IPE magazine’s December issue
Balfour Beatty has re-negotiated the terms of its pension fund recovery plan, transferring ownership of £85m (€115m) in private finance initiative (PFI) assets to a new limited company.The firm would not be drawn on the ownership arrangements of the limited company, but similar asset transfers to Scottish Limited Partnerships have been used as a vehicle for asset-backed funding agreements in lieu of contributions to pension funds in deficit.According to Balfour Beatty’s 2013 annual report, the Balfour Beatty Pension Fund was 88% funded at the end of March 2013.At the time, the sponsor agreed to an eight-year recovery plan that would have seen payments of £460m made over the course of the agreement. In a statement to the London Stock Exchange, the company said today that an £85m deficit reduction payment would be made over an eight-year period, starting in 2016 with a £4m cash payment that would then increase in undisclosed increments.It comes in place of an £85m cash payment promised as part of the £820m sale of Parsons Brinckerhoff, which would have also seen a £200m share buyback that the company cancelled in January.Leo Quinn, the company’s chief executive, said he was pleased the trustee had agreed to the new arrangement.“This gives a clear plan on how the pension deficit will be reduced over time, whilst maintaining balance-sheet flexibility as we drive the required organisational change and performance improvement, as set out in the Build to Last programme we announced last week,” he said. In other news, annuity provider Just Retirement has seen its annuity sales decline only 4%, despite the UK government’s no longer requiring individuals to annuitise pension pots.In its interim report for the six months to December 2014, the company said it was able to offset the decline in individual business with a 39% increase in bulk annuity sales, with total business peaking above £660m.Rodney Cook, Just Retirement’s chief executive, said he was “delighted” to be able to report “resilient” profits despite the regulatory changes.For more on the bulk annuity market, read Taha Lokhandwala’s assessment of the growing business in medically underwritten bulk annuities
He said sustainability aspects were important considerations in every investment AP1 made.“In our view, efficient use of scarce resources is not only key to addressing global challenges but also contributes to long term returns,” Angberg added.Osmosis said its new fund aimed to produce higher risk-adjusted returns than the MSCI World and MSCI World Minimum Volatility indexes by investing in a minimum-variance portfolio of “resource-efficient” stocks.It is targeting a return of 2% more than that of the MSCI World Developed Minimum Volatility benchmark over a market cycle, while at the same time cutting investors’ ownership of carbon, water and waste relative to the benchmark by more than 70%.Sweden’s AP funds have been reducing their portfolios’ carbon footprints for some time, and agreed a joint reporting system for this in 2015.Ben Dear, founding partner at Osmosis Investment Management, said the firm had been seeing more demand for both style and regionally-based portfolios, where economic and environmental returns were not mutually exclusive.“The growth in assets deployed against our resource efficiency thesis over the past 12 months is further testament to the forward-thinking nature of the holders of long-term capital,” he said. “There is a growing understanding that the sustainable deployment of capital is a potential source of additional alpha.” Swedish national pensions buffer fund AP1 is investing $250m (€235m) in a new fund launched by Osmosis Investment Management targeting low-volatility stocks that are also considered efficient in their use of environmental resources.One of the aims of the new fund is to address concerns that low volatility portfolios have more exposure to resource-intensive industries such as the utilities sector, which Osmosis said have “significant non-financial risks”.The SEK290bn (€30.5bn) Swedish pension fund has seeded the Osmosis MoRE World Resource Efficiency Fund – Low Volatility.Mikael Angberg, chief investment officer of AP1, said: “With respect to AP1’s overall portfolio, this investment not only reduces our carbon footprint but also improves water efficiency and waste management while keeping a low volatility profile.”
With regard to risks from an energy transition, a DNB survey found that 12.4% of Dutch pension funds’ balance sheets were exposed to carbon-intensive sectors facing increased transition risks. On a positive note, the regulator found that Dutch pension funds and other financial institutions appeared to have only limited exposures to countries deemed most vulnerable to climate change.It came up with this assessment after applying a “vulnerability index”.Green finance warningsDNB also cautioned that growth of the market for green finance could lead to a “green bubble”, where investments were overvalued and asset prices had to be adjusted.It also said that financial institutions should be aware of the risk of reputational damage due to greenwashing of products such as green bonds.There appeared to be a need for more “unambiguous standards” for green investments, the regulator said. Supervisors should not relax rules to promote sustainable finance, it added.“We have noticed that some parties are calling for such action at national and international fora, often arguing that capital requirements imposed on sustainable finance should be lowered,” it said.However, in DNB’s view capital requirements should not be lowered to realise social objectives, as their purpose was to absorb unexpected losses and must therefore adequately reflect properly quantified risks.Also, pricing negative externalities and fiscal incentives were more effective and efficient options for achieving climate goals, it said.DNB’s report is available here. Pension funds needed to broaden their approach to assessing energy transition implications as they, and insurers, often seemed to limit their considerations to their actively-managed equity portfolios, said DNB.“[A] more holistic approach regarding their total balance sheet is in most cases lacking,” it said.Real estate risksThe regulator also warned that a new sustainability requirement for Dutch buildings could pose risks for pension funds.Due to be effective from January 2023, the requirement means all office buildings must have at least a “level C” energy label, or else they must be taken out of use.It found that pension funds and insurers were less exposed to commercial real estate with lower range energy labels than banks were, but said that “as the owners of these buildings, pension funds and insurers are directly responsible for investing in sustainability measures”.Dutch pension funds have invested 9% in commercial real estate and their mortgage portfolios continue to grow, DNB said.The regulator added the investment impact depended on a number of factors and that it did not have a comprehensive overview of the label distribution of all investments and loans related to office buildings.Focusing on the physical impacts of climate change, DNB said that banks, insurers and pension funds needed to take into account the risk of flood damage impairing investments.The risk could be realised if flooding necessitated substantial public spending and shrank tax revenues, thereby triggering credit downgrades and affecting sovereign bonds held by pension funds, insurers and banks.#*#*Show Fullscreen*#*# Dutch pension funds should expect to be quizzed by their supervisor about their approach to climate-related risks, according to a report published by De Nederlandsche Bank (DNB) yesterday.The financial regulator said it intended to embed climate-related risks more firmly in its supervision with the aim of ensuring sustainable financial stability.It will incorporate climate-related risks in its assessment frameworks and address them in its interviews with supervised institutions, it said. These include pension funds and insurers.DNB is currently working on a stress test for risks arising from the transition to a lower-carbon economy. It is approaching this from macroeconomic and macro-prudential perspectives.
Earlier this year GPIF selected three ESG domestic equity indices, two broad ones and one geared towards empowering women. At the time it said an index with an environmental theme was being examined.GPIF president Norihiro Takahashi said: “As a universal owner and long-term investor, GPIF understands that environmental issues such as climate change are an important ESG factor.”Most existing environmental stock indices, however, sought to decarbonise portfolios by excluding certain industries, he said.“Consequently, few indices aim to build a green economy, evaluating companies across the board that contribute to sustainable environment,” Takahashi continued. “Therefore, we have decided to request proposals for global environmental stock indices.”GPIF requested innovative ideas from applicants based on their “abundant” expertise in evaluation and index construction methodology.For example, it expressed an interest in indices that “may help lift overall stock markets both in Japan and worldwide”.GPIF asked vendors to propose two indices based on the same concept: one for international equities excluding Japan and one for Japanese equities. They should ideally also submit an index of global equities including Japan “for the purpose of comparative analysis”.The proposed indices should provide the same levels of return as their capitalisation-weighted parent index and improve risk-adjusted returns in the long run.This should be proven through past performance and a back test, according to the GPIF.The vendors should “disclose data necessary for passive investment” and the indices should have “a capacity for considerable investment”.As part of the selection process GPIF will carry out “field research” to assess long-listed applicants’ governance system. The pension fund’s CIO has previously argued that investors should pay more attention to index vendors’ operations and governance given the influence they can wield. GPIF has appointed transition managers for its domestic and foreign equity portfolios, it announced today. Russell Investments Japan was selected for domestic equities, and BlackRock Japan for foreign equities.GPIF recently announced performance results for the second quarter of its 2017 fiscal year. Its portfolio gained ¥4.45trn, roughly 3%. On annualised basis from fiscal year 2001it has gained 3.2%. The world’s biggest pension fund wants to track its investments against an innovative global equities index that selects companies contributing to solving environmental issues.In a tender notice, Japan’s ¥157trn (€1.2trn) Government Pension Investment Fund (GPIF) said the index should select equities based solely on environmental, social and governance (ESG) factors, focusing on the environment.The fund is looking to make a positive impact on the environment, and said the index should be based on “the concept that encourages to seek the solution of environmental issues, rather than uniformly excluding companies in specific industries or types of business (so-called negative screening)”.Citing the cross-border nature of environmental challenges, the fund said it had put on hold the selection of an environmental index for domestic equities to prioritise the search for one for global stocks.
“We expect the first closing in November and further closings until 2020,” explained Bernhard Graeber, head of infrastructure at the Evangelische Bank, during a presentation in Munich.He said that the fund would make investments into local banks in emerging markets alongside DEG, which would help select new investments for the portfolio.“But we also have our own adviser and will be checking each investment against the fund’s targets,” Graeber added.These include adherence to sustainability criteria defined by the protestant churches in Germany, as well as limits on credit risk, country exposure, and lender exposure.The portfolio has a net return target of 6% after fees annualised by 2030, in US dollar terms, or 4% when hedged to euros.DEG noted at the presentation that many of its local investments had few non-performing loans, meaning the credit risk could be considered much better than the average rating for the country overall.Additionally, DEG will advise the emerging market banks on new strategies, ESG issues and lending policies to promote more sustainable financial markets in each of the countries.“We have developed our own rating tool based on the UN’s sustainable development goals (SDG) to assess the progress of banks we have invested in,” said Marina Dietz, director and vice president of DEG.“This tool is now also used by other development finance banks,” she added.The bank loans are granted to private institutions only and are mostly issued in dollars.“These investments have a lower risk factor than single micro loans and they help to fill the financing gap for SMEs, which often exists in emerging markets,” Dietz said.German Hauck & Aufhäuser will be serving as custodian for the Luxembourg-based vehicle.The Evangelische Bank has been working with DEG on an emerging market renewable energy fund since 2014.The next solo project for the Evangelische Bank will be a renewable energy fund with investments in continental Europe mainly targeting churches again.“In this fund we have mainly churches as investors but for the SMEs fund we have seen a lot of interest from pension funds and insurers,” Graeber said. Germany’s Evangelische Bank has targeted $200m (€174m) for a new loans fund investing in small and medium-sized companies (SMEs) in emerging markets.The €4bn asset manager for German protestant churches and their pension funds will seek to raise the money over the next two years, it announced earlier this month.Together with the German development bank DEG, the protestant churches will be investing in local banks in emerging markets, which then offer loans to local SMEs under certain conditions linked to environmental, social and corporate governance (ESG) criteria. The fund will also be open for for investment by other German and Austrian institutions, with the minimum investment set at €250,000.
Michael Nellemann Pedersen, CIO of PKA – which manages four Danish labour-market pension funds – added that, as a long-term sustainable investor, his firm was looking for further clarity in sustainable finance.The EIB said it was the first issuer to link the use of green bond proceeds to activities that contribute to climate change mitigation, and hoped that this would start the ball rolling on an extension of eligibility criteria within evolving EU legislation.Eila Kreivi, director and head of capital markets at the EIB, said: “The strong response to this rare transaction proves the attention of long-term sustainable investment to the EU initiatives on sustainable finance, notably the relevance of the EU sustainability taxonomy.”The bond issue was led by Danske Bank as sole lead manager, with a number of its domestic investor clients buying the bonds.Bo Søndergaard, head of SRI bond marketing at Danske Bank, told IPE that, not only was it the first climate awareness bond to be issued in Danish kroner by the EIB, but it was also the largest green bond in the Danish market.“It is quite a milestone transaction as the EIB has not done a Danish kroner bond for the last 10 years,” he said. “Demand for this issue was strong and driven by increased interest from Danish and international accounts in buying green bonds, and of course a number of the participants have a natural need for long-term bonds.”The bond runs until 14 November 2031. The EIB said it was priced with a spread of 40bps below mid-swaps, equivalent to 27.7bps over the Danish government bond due 15 November 2029. Danish pension funds ATP and PKA have invested in the European Investment Bank’s (EIB) DKK3bn (€402m) green bond issue, launched last Thursday.It is the first green bond issued in Danish kroner by a sovereign, supranational or agency (SSA) issuer, and is also a “climate awareness bond”, with Danske Bank leading the issue.ATP declined to say how much it had invested in the bond, but senior portfolio manager Lars Dreier said the pension fund valued the bonds for the transparency and accountability they generated in sustainable finance.“We acknowledge EIB’s effort to align with the EU Green Bond Standard via linking to the EU sustainability taxonomy and the external verification of both allocation and impact reports,” he said.
Estonia’s LHV Asset Management (LHV) has, on behalf of its pension funds, invested in the €126m BaltCap Private Equity Fund III (BPEF III), along with SEB pension funds in Estonia, Latvia and Lithuania.The new fund, whose first close raised more than the initial target amount, will continue the “buy-and-build” strategy of its predecessor funds, BPEF I and BPEF II, making equity investments in mature innovative enterprises to build them into “business champions”. The fund will aim to make eight to 10 platform investments in the Baltic and Nordic countries, the enterprise values of these companies typically being €10m to €50m and the fund’s equity investment in them between €10m and €20m.LHV’s pension funds are, in aggregate, one of the largest investors in the fund. Others include the Nordic Environment Finance Corporation, the European Investment Fund investing partially through Baltic Innovation Fund 2, the European Bank for Reconstruction and Development, eQ Asset Management, and family offices. Martin Kõdar, managing partner, BaltCap, said that in addition to the Baltics, BaltCap’s core region, the fund will also focus on Finnish and Swedish companies with a Baltic nexus.Allan Gaidunko, portfolio manager, LHV Asset Management, told IPE: “We decided to invest in BPEF III mainly as part of our mission to continue supporting the local economy and the growth of local companies.” He said that in their previous funds, BaltCap’s team had showed their ability to successfully build up and exit local companies.Total pension fund assets managed by LHV amount to around €1.3bn, with about 8% invested in private equity funds.Endriko Võrklaev, fund manager, SEB Investment Management, said: “Today more and more growth stories can be found outside listed markets.”“We consider local private companies a good match to the local pension funds with a long investment horizon,” he added. “Our growing exposure to local economies also helps us to remain competitive against local inflation.”
Prior to this, he was senior sales consultant at JLT Benefit Solutions, which followed a decade spent at Aon Consulting in various roles, where he was responsible for client satisfaction, client development and new business opportunities.OneDB brings together the suite of WTW’s technology, intellectual capital and innovation services and expertise, creating a joined-up strategy that reduces risk, controls cost and improves service for trustees and members, through a single provider.Gareth Strange, head of OneDB at WTW, said: “The launch of OneDB has provided trustees and corporates with a radical approach to managing largely legacy-defined benefit liabilities. Appointing James Lewis as a business development leader ensures we can support a significant growth in the number of clients and show prospects the value OneDB can bring to them and their members.”Pensioenfonds Horeca en Catering – René Rijk has joined the €12bn Dutch pension fund for the hospitality industry as an investment manager. He joined from TKP Investments, where he had worked for more than 10 years, primarily in real estate portfolio management. His role at Pensioenfonds Horeca en Catering covers all asset classes the pension fund allocates to – from equities, bonds and alternatives such as real estate and private equity. The pension fund invests entirely via external asset managers. Nuveen – Jose Minaya, the asset manager’s president, has been appointed to the position of chief executive officer effective 13 January next year, when current CEO Vijay Advani becomes executive chairman. Minaya was named president of Nuveen, the investment manager of US pension fund TIAA, in June this year. He joined TIAA in 2004, became leader of Nuveen’s real assets business in 2015, leader of all of Nuveen’s global investments organisation in 2016, and then CIO in 2018. As CEO, he will lead the firm’s day-to-day operations, help set strategy in partnership with Advani, drive key initiatives and chair the Nuveen executive committee. As executive chairman, Advani will specifically concentrate on three key growth areas: impact and ESG investing; the further development of Nuveen Labs; and growing Nuveen’s business and investment capabilities outside the US.ABN Amro Pensioenfonds – The €29bn pension funds of Dutch ABN Amro bank has named Marcel Verheul as chairman of its executive board as of 1 February. He is to succeed Mattijs Hooglander, who had chaired theboard since the departure of Geraldine Leegwater last year. Currently, Verheul is director client relations at pensions provider AZL. He worked at provider PGGM between 2006 and 2015, the last five years of which he was director of institutional relations.Heineken Pensioenfonds – Olaf Flippo has started as director of the €3.8bn Dutch pension fund of Heineken, succeeding Frank de Waardt who has taken retirement after 20 years in the job. During the past nine years, Flippo has been Global Director Rewards at Heineken, also responsible for pensions. Between 1997 and 2003, he was acturial adviser at consultancy PwC. He has also been chairman of the pension fund’s accountability body.Syntrus Achmea – Syntrus Achmea Real Estate & Finance (SAREF) has appointed Daan van der Werf as Director Investor Relations as of 1 January 2020, responsible for account management, business development, marketing and communication. He is to succeed Philip Hosman who left for Altera Vastgoed. Van der Werf is to join from Triodos Investment Management, where he is temporary head of business development and investor relations. Prior to this, he worked at Delta Lloyd AM, Kempen CM and ABN Amro AM.Avida International – The firm has appointed Patrick Woods as head of commercial development based in the UK. Having commenced his career lecturing in Economics at the Dundalk Institute of Technology Business School, Woods joined Standard Life’s Irish investment team in Edinburgh in the mid-1990s, initially as economist and equities analyst. Over the subsequent decade he went on to manage multi-asset portfolios joining the organisation’s global asset allocation committee. Following a period where he was responsible for the management of Standard Life Investments Irish business, he was tasked with establishing the organisation in Europe. He achieved considerable success, with the firm becoming a leading asset manager in the Dutch institutional marketplace. More recently, he has been responsible for the management and development of key relationships incorporating clients in North America and Scandinavia.PGIM – The $1.3trn (€1.2trn) global investment management business of Prudential Financial, has made three hires into its Institutional Relationship Group (IRG), all reporting to Cameron Lochhead, global head of IRG. IRG is dedicated to deepening strong relationships with chief investment officers and senior investors at global institutional clients and continuing to grow PGIM’s reputation for superior client service.In Europe, IRG has expanded its local presence with two senior additions to the team. Stephen Oxley has joined as managing director based in London, responsible for continental Europe and Middle East client coverage, while Udo von Werne, also a managing director, based in Zurich, is responsible for the DACH regions of Germany, Austria and Switzerland.Oxley joins from PAAMCO Prisma (formerly Pacific Alternative Asset Management Co.) where he was for 16 years, most recently as vice chairman and partner, heading up PAAMCO’s European office and working with clients across Europe and the Middle East. Prior to that he was a senior investment consultant at Watson Wyatt.Von Werne was previously at Nikko Asset Management where he was chief executive officer for the EMEA region, based in London, and prior to that was head of institutional clients, Continental Europe, at Pictet Asset Management for 15 years, based in Zurich. Previously, he held senior roles at Zurich Financial Services and UBS in Zurich. He replaces IRG’s Wolfgang Sussbauer, who becomes head of Germany & Austria at PGIM Fixed Income, based in PGIM’s Munich office.In the US, Keshav Rajagopalan has joined IRG as institutional client director, working with clients across the US and Canada, as well as leading a number of global strategic initiatives. He joins from PGIM Investments, the global manufacturer and fund distributor of PGIM, where he was co-head of the ETF business having spent the last three years spearheading the firm’s entrance into the space. Prior to joining PGIM Investments, he spent several years on the PGIM corporate strategy team supporting senior leaders across the business on various strategic priorities. Earlier in his career he was a management consultant at McKinsey & Company.VvV – The Dutch Association of Insurers (VvV) has appointed Geeke Feiter-van Heuvelen as director, in addition to the executive team comprising chair Richard Weurding and Harold Herbert. Feiter-van Heuvelen has ample experience in the insurance industry, having been responsible for private claims in the Netherlands and Belgium at Nationale Nederlanden. She has also been active in the distribution of insurance across intermediaries and banks. For the past two years, she has headed the advisory and executive centre for safe living (Centrum Veilig Wonen) in the area in Groningen affected by earthquakes as a consequence of gas mining.Bouwinvest – The €12bn Dutch property investor Bouwinvest Real Estate Investors has named Gabriëlle Reijnen as a member of its supervisory board (RvC). She has more than 25 years of management experience, spanning client and portfolio management, finance and risk at a wide range of organisations, including large multinationals and start-ups, both in the Netherlands and abroad. Reijnen has been managing director at ABN Amro and Alvarez &Marsal, as well as head of corporate coverage and a member of the management board at the Dutch branch of Royal Bank of Scotland. She has also held RvC positions at Aegon Bank, Aspen Oss and Beter Bed Holding. With her appointment, the RvC – also comprising Jos Nijhuis, Jos van Lange and Wendy Verschoor – is now complete.Dalriada Trustees – Independent professional trustee services firm Dalriada has appointed Charles Ward as a professional trustee. He joins from the pensions advisory team at PwC and will be based in Dalriada’s Birmingham office. He is a qualified actuary with almost 25 years of experience in advising companies and trustees on long-term pension scheme strategy and innovative funding, investment and benefit design projects. Prior roles with leading institutions including PwC, KMPG and Mercer have included work on a range of complex restructuring situations for distressed sponsors, implementation of member options exercises, Pension Protection Fund levy management advice and numerous corporate transactions, including clearance applications to The Pension Regulator.Pensions for Purpose – Alex Noble has joined the platform on a part-time basis to support co-founders Karen Shackleton and Stephanie Windsor. In the financial sector she has worked at institutions such as Gartmore, Bankers Trust and Lazard and Standard Chartered Equitor, and through her own company she provides advisory services to pension fund trustees, sponsors, fund managers and consultants. Other roles include chairing Future-Fit Ltd.Pensions for Purpose said her appointment followed “exceptional growth in its business”. It said it now had 66 “Influencer” members (asset managers, law firms and consultants) posting content on the online platform about ESG, sustainable and impact investment, and 80 “Affiliate” members (asset owners and their advisers).Insurance & Pension Denmark/Industriens Pension – Laila Mortensen, the chief executive officer of labour market pension fund Industriens Pension, has been elected as the new chair of the supervisory board of sector association Insurance & Pension Denmark (IPD, Forsikring & Pension). At the lobby group’s annual meeting in Copenhagen today, Anne Mette Toftegaard and Allan Polack – the ceo of LB Forsikring and PFA Pension, respectively – were also voted in as deputy chairs. Willis Towers Watson, Mercer, Nuveen, ABN Amro, Heineken, Syntrus Achmea, Avida International, PGIM, VvV, BouwinvestWillis Towers Watson – The consultancy has appointed James Lewis as head of sales for OneDB, its integrated actuarial, administration and investment pension service.Lewis will be responsible for supporting the delivery of OneDB to new clients, in response to a significant growth in demand from trustees and corporates seeking an integrated service for their defined benefit (DB) pension scheme journey and business plan.Lewis joins from Mercer, where he spent nine years as senior sales leader, responsible for the sale and marketing of services across the business, leveraging both internal and external relationships.
The head of pensions and insurance group Folksam has pleaded with the Swedish government to close gaping tax inequalities between mutual providers and public limited firms under the new IORP II regime.In an open letter to Finance Minister Magdalena Andersson, Folksam’s chief executive officer Ylva Wessén, wrote: “For Folksam and our customers, who are also owners, it is important to make such an adjustment to the tax legislation, which may be considered to be of limited scope, as soon as possible.”Mutual pension firms are being put at a competitive disadvantage to those providers incorporated as public limited companies here, according to Folksam, which manages SEK454bn (€43bn) of largely pension assets.At issue is that tax legislation to create the conditions customer-owned companies need, has not been adapted for the new law on occupational pension companies (2019:742), which was passed in November, the firm said. Folksam lauded the pensions legislation itself, which puts the EU’s IORP II directive into the domestic rulebook, saying the law would “ensure adequate protection for current and future pensioners and the effective management of occupational pensions for millions of occupational pension savers”.But in order to come under the scope of the new IORP II law, occupational pension providers must convert their pensions business into a separate occupational pension company, which Folksam said involves transferring pension assets internally – a move which under current law would incur taxes.Wessén said the missing adjustment to tax legislation meant that “customer-owned occupational pension companies, and thus the customers, risk unjustified tax collection,” adding that limited companies were not correspondingly affected.“The tax effects for customer-owned companies can amount to at least a few hundred million and at most a billion kronor,” she said. A billion Swedish kronor currently equates to around €100m.As a result of these tax effects, a large number of pension savers were excluded from the new IORP II law and therefore lost the benefit of the new legislation, Wessén said.Although the Swedish parliament passed the IORP II legislation late last year, the move had been rushed partly to avoid penalties from the EU for further delay.However, the political debate around the suitability of the directive in the domestic pension system has continued in Sweden, and a raft of amendments to the act are now underway, and scheduled to come into force in December.Looking for IPE’s latest magazine? Read the digital edition here.