At Cometa, the €7.3bn scheme for workers employed by the metal and mechanical engineering industries, the membership issue is more urgent. The scheme has about 427,000 members, less than half the one million potential members in the sector. The figure is unlikely to rise significantly in 2013 because of the condition of the sector, where factories are closing or laying off workers. So the scheme is focusing on keeping its current members.
As a consequence, rather than trying to convince workers to subscribe to a scheme to which they do not need to contribute, the board is focusing on its investment strategy, as well as ongoing dialogue with political institutions, to find solutions to the economic woes
of the sector.
Director general Maurizio Agazzi says: “We would like to see a change in the system. If lawmakers are to give schemes the possibility to diversify into more attractive asset classes, they should encourage schemes, large and small, to invest directly in the economy and make the country grow.
“We see two main ways to make this happen: first, there are large masses going towards foreign bonds and equities. We need to bring these investments back to Italy by allowing schemes to shift significant percentages of their portfolios towards private equity and real estate investments which fund the Italian economy. That is why we have been discussing ways to invest together with the government in such projects. The other way for pension schemes to fund the economy would be setting up private investment funds to invest in small and medium-sized firms, the sector which is suffering the most in Italy. We would need to develop solutions that would give acceptable returns and lay the foundations for growth.”
Agazzi recognises that many funds need to be better prepared if they want to take advantage of these possibilities. In particular, internal audit structures need to
Cometa already has a very solid audit structure, but it took some time in the past year to review the structure and make sure it was in line with the latest guidelines by the regulator COVIP.
In March 2012, COVIP published a document on the “realisation of investment policy” asking schemes to draw up a document outlining their investment policy objectives, giving evidence of how they respect audit, contracts and transparency guidelines.
Schemes were asked to submit the document by the end of December last year. Agazzi says it was an opportunity to examine again Cometa’s investment objectives, especially in light of the current climate.
“We worked on reviewing our objectives with a particular focus on how we evaluate what our expected returns are. We also strengthened our liability management capacity with new tools that allow us to constantly watch the changing pension needs of our members and to tailor the investment proposition to them.”