Canada Pension Plan Investment Board (CPP Investments), the investment management organisation for the Canada Pension Plan, has bought a minority stake in German fund administrator Universal Investment, it announced yesterday.

CPP Investments has acquired the stake in Universal Investment from private equity firm Montagu through CPP Investment Board Europe Sarl.

Montagu, which took over Universal Investment in 2017, has agreed to further invest in the fund administrator, it said.

Universal Investment plans to expand geographically, particularly in the North American market, following this latest funding round, it said, adding that it will continue to invest in its home markets to expand its products and services for institutional investors and asset managers.

It recently acquired Luxembourg-based European Fund Administration (EFA), a provider of fund administration and private asset services.

Michael Reinhard, chief executive officer at Universal Investment, said: “Our development into one of the fastest growing European fund service platforms was a decisive factor for CPP Investments to invest.”

Hafiz Lalani, managing director and head of European direct private equity at CCP Investments, added: “We look forward to supporting Universal Investment in the next stage of expansion. We are confident this will deliver long-term value for Universal Investment’s customers and employees as well as CPP’s contributors and beneficiaries.”

Parliamentary committee postpones discussion on pension reform

The social security and health committee of the Council of States (SGK-S), the upper house of the Swiss parliament, has decided to postpone discussions on the reform of the second pillar pension system.

The SGK-S wants to take the necessary time to carefully examine the measures to compensate the generation caught in the reform for the reduction of the conversion rate used to calculate pension payouts from accrued assets upon retirement – Umwandlungssatz – from 6.8% to 6%, it said yesterday.

A draft on the compensatory measures will therefore not be ready for the autumn session, the committee added. The Council of States had rejected the proposal to reform the second pillar during the summer session and sent it back to the committee asking for further clarifications.

The Swiss pension fund association (ASIP) has called on the SGK-S to refrain from discussing and approving “unrealistic and expensive” solutions to reform the second pillar, instead leaning towards the version of the reform approved by the National Council, the lower house of parliament, last year.

The National Council voted in favour of compensatory measures for the reduction of the conversion rate used to calculate pension pay-outs, from 6.8% to 6%, spread over a period of 15 years, only for a targeted group of retirees. The proposal approved by the National Council is “fair and affordable”, ASIP added.

Swiss cabinet consults on interest-free account for Stiftung Auffangeinrichtung

The Swiss government (Federal Council) has started consultations to amend the law allowing the occupational pension scheme Stiftung Auffangeinrichtung BVG to deploy vested benefits to the Federal Treasury without applying an interest rate for a further four years.

The parliament had already allowed in 2020 the scheme to deploy vested benefits worth up to CHF10bn (€10.3bn) without interest rates for three years, if its funding ratio would fall below 105%.

The institution, supported by the social partners, is required to accept all vested benefits from pension funds if employees cannot transfer them to another fund after the termination of an employment position. BVG must guarantee the amount of funds received.

The scheme was seeking parliamentary approval for its request to open a non-interest bearing account that will help fend off the impact of negative interest rates, the impact of the COVID-19 pandemic, and potentially rising unemployment, it told IPE.

“We are relieved that the Federal Council has accepted our request for a non-interest bearing account and we hope that parliament will approve the proposed amendment,” it said in a statement.

FSIO tenders projects to assess past reform

The Swiss Federal Insurance Office (FSIO) is tendering three mandates for research projects to assess the governance, supervision and transparency of the structural reform of the second pillar pension system conducted in 2010.

The Parliament has instructed the Federal Council to evaluate whether the structural reform of 2010 has met its goals.

The deadline to apply is 17 October, with the projects set to start in November this year to be completed in August 2023, the FSIO said. Interested parties can submit bids for one or more projects.

The evaluation project on governance primarily pursues the goal to assess whether and how the measures taken to improve governance in pension funds have been implemented, identifying difficulties in terms of implementation, and the long-term impact of the measures to strengthen governance.

The reform in 2010 introduced a clearer definition and a better division of tasks and responsibilities between who is responsible for the operation of pension institutions, supervision, and auditors.

The evaluation project on supervision will find out whether measures to reinforce direct and overall supervisory activities have been implemented.

With the reform, direct supervisory activities were split regionally, while overall supervision remained under the occupational pension supervisory commission OAK BV.

The project on transparency has the same goals as the other two projects.

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