Asset Allocation – Page 173
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Features
How pension funds are addressing biometric risk
Pension funds are dealing with biometric risks in a number of different ways. A few of them explain their particular approaches . ABP, Netherlands “We fund our benefits 100% by ourselves. We are large enough to bear the risks,” says Alexander Paulis, chief actuary at the largest pension fund ...
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The challenges lying ahead
Hugo Clemeur of the Association of Belgian Pension Funds, Brussels Apart from the preoccupations caused generally by the demographic evolution compounded with slow economic growth, the second pillar pensions sector in Belgium faces a number of challenges of which I would mention only three, although many more could be mentioned ...
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Alchemy to the rescue?
Portable alpha offers pension funds the investment equivalent of alchemy – transmuting non-performing into performing assets. Using swaps or futures contracts - a process known as equitisation - funds can transfer or ‘port’ the alpha generated by one asset class to other asset classes in their portfolio. In this way, ...
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Applying an objective view
One of the reasons that portable alpha has yet to be adopted by pension funds may be that it does not appear to meet their needs. Although it is conceptually attractive, its seems to have no practical application. Ronald Ryan, founder and CEO of US-based Ryan Asset Liability Management believes ...
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The next big thing?
They could be the ‘new big thing’ in the US savings industry. And like the individual retirement accounts, the new Health Savings Accounts (HSAs) imply putting aside tax free money and investing it in stocks and bonds. Although the sums are smaller, the potential is not: there could be $75bn ...
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Features
The bottom line of catastrophe
Politicians will tell you that everything changed on 11 September 2001. But then again, so will insurance companies. For the first time, hedging a bet against a major catastrophe, in the form of a terrorist attack, does not seem like a good idea. Unsurprisingly, insurance companies are still reluctant to ...
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Features
Changing managers can destroy value
The hiring and firing of investment managers by institutional investors in the UK and US can be a value-destroying activity, according to a report by global investment consultant Watson Wyatt. The paper states there is “room for improvement” on the part of institutional investors when it comes to decisions about ...
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A changing marketplace
While it may be natural for European institutional investors to see European equities as a core asset class, what is not so clear is what should be included within that definition, and on what basis managers should be selected. The US market has a culture of much more specialisation of ...
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Conflicting priorities
In Hungary, as in many countries, the task of financing the state pension system is a growing problem. As market economics took hold in Hungary at the beginning of the 1990s, the real value of pensions fell away. This in turn made it clear that additional, private, funded pension provision ...
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Features
Conflicts still a possibility
Last month the UK’s Financial Services Authority (FSA) warned consultants, asset managers and pension fund trustees to guard against potential conflicts of interest in a highly concentrated consultant industry. The financial watchdog’s ‘Financial Risk Outlook 2006’ raised concerns about an over-dependence by pension fund trustees on the advice, skill and ...
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Features
Making the connection
Although British Telecom (BT), the UK’s incumbent telecoms operator, provides pension schemes in each of the 140 or so countries in which it operates, only a tiny proportion – around 0.3% – of the £34bn €49.5bn) of assets under management are accounted for by the company’s foreign subsidiaries. “The UK ...
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Features
Working in a data minefield
Sector funds were introduced at the beginning of 2004 following the enactment of the Vandenbroucke Law to broaden membership of second pillar schemes. While this aim is well on the way to being achieved other challenges remain. When the law became effective, some sectors already had in place a Fonds ...
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Features
A different kind of risk
People are living longer. It may be good news for the population at large, but pension fund managers will not be celebrating. Longevity risk has become a serious issue to grapple with. Annuities are costing more, and insurers are getting agitated, demanding more information from pension funds and raising their ...
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Features
Going for full disclosure
IPE asked three pension funds in three countries – in Austria, Estonia and Portugal – the same question: ‘What factors do you have to disclose?’ Here are their answers: Robert Kitt is fund manager at Estonia’s Hansa Investment Funds which has second pillar AUM of €155m and third ...
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Features
The 'generation pact' policy
Considering the expected demographic developments in Belgium, the level of employment in is too low, as a result of which the social security scheme being based on repartition (active people finance the social security system on behalf of inactive people) will come under pressure. In order to safeguard the Belgian ...
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Going their own way
While governments across Europe are pulling out all the stops to ensure working people are making enough provision for retirement, the dominant forms of non-state pension schemes vary from country to country. Besides corporate schemes and industry-wide schemes, professional schemes perform a vital role on the pensions stage, even though ...
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Features
A guarantee of limitations
Last month one of the most famous monuments in Belgium and star of the 1958 World Expo - the Atomium - re-opened after more than a year of renovation work. Newly gleaming in the crisp winter sunshine, this remarkable structure of giant interconnected mirrored spheres presents an enduring – though ...
