IPE Awards panelists stress communication
NETHERLANDS – Panelists at an IPE Awards panel in Amsterdam today stressed the importance of communication in the pension industry.
As Guenther Schiendl, head of investments at Austria’s APK-Pensionskasse, said: “I think it’s the job of the pension funds industry to think about communication.”
The view was backed up by Adrian Cunningham, who manages the European Parliament scheme: “We shouldn’t be afraid to communicate with our members. We should learn the lessons that we shouldn’t be afraid to talk to our members more.”
Crucially, politicians also had to be communicated with, the panelists agreed. Cunningham said: “I think politicians of all parties are bad for pension funds. I think the need to look forward is very difficult for them.” He called for non-political bodies to deal with pension issues.
“You have to inform them, brief them, teach them. If you don’t, you’re a sitting duck for them,” said Karel Stroobants, the former head of the Belgian pension fund association.
Schiendl said the way forward for pension fund management was set to up “clear and defined expectations and then act according to them. We have to manage our expectations”. He said APK was looking at targeted returns, in terms of what it wants to achieve by the end of the year. “We need a clear idea if what we need to achieve year by year – it’s about composing a picture.”
And what about the lessons of three years of poor markets? ”I think there is a real sense that the boom disguised the true cost of pension funds,” said Eric Lambert of WM Co. But he said there was no evidence of a wholesale withdrawal from equities.
“There’s nothing new in the market - we have known it,”said Stroobants. “Unfortunately we did not put buffers away.”
APK’s Schiendl observed: “It’s a question of how you manage your investments.” He advocated moving away from the idea of just buying and holding investments, driven in part by annual balance sheet concerns. “For a long time pension fund management has been seen as asset management, now we are risk managers and asset managers,” he added. “We need to take risks and we are taking risks.”
The investment consultants got off quite lightly, with the panel saying they were useful to validate ideas. “It is a matter of getting value for money,” said Paul Kelly, a former consultant in charge of pensions at telecoms firm Vodafone. “You need to have experts and consultants are experts.”
But Schiendl said consultants should spend more time getting to know the individual plans they work on. “I think consultants have to get a better grip on reality,” he said.
Stroobants saw the line between consultants and assets managers becoming blurred – though he conceded that consultants were victims of the short term viewpoint. “You can’t take away the responsibility to a board of trustees,” Stroobants said.
The panel took place in Amsterdam before the third annual IPE Awards ceremony in Amsterdam.