Letters From... – Page 13
-
Analysis
IORPs back on agenda
A planned wide-ranging green paper on the state of pensions in the EU is causing anxiety in the industry. The ‘holistic’ approach of the European Commission policy paper – due to be presented in the summer – could throw into question the current ceasefire over the solvency issue for the ...
-
Analysis
Boost to derivatives legislation
Flesh is being added to the bones of the proposed regulation to cover legislation of the vast derivatives markets in the EU, and the European Parliament’s EP Economic and Monetary Affairs Committee (ECON) is generally welcoming of the tough stance put forward by its co-ordinating MEP.
-
Analysis
Derivatives not WMD
Derivatives, and credit-default swaps in particular, have become synonymous with Wall Street wrongdoings, and in Europe authorities want to tightly regulate them, even ban speculative derivative trades. President Obama has promised reforms that would fix problems in the derivatives market, starting with trading all derivatives onto transparent exchanges.
-
AnalysisAutomatic for the people
US money managers could receive an estimated $100bn (€73bn) over five years to invest on behalf of the 78m workers who do not have a pension – 50% of US employees – if a proposal by the White House is approved by the Congress.
-
Analysis
Capital is not a panacea
Brussels, the Basel Committee, and other regulators striving to increase the minimum reserves of the banks have apparently got it wrong. Regulators wanting to reduce the risk of a further financial and economic crisis should concentrate their efforts somewhere else, according to the European Banking Federation (EBF).
-
Analysis
EFRP sets out its stall
The European Federation for Retirement Provision (EFRP) has called for a more logical, thought-out and co-ordinated approach to pensions policy in the European Union in its strategy paper, “Beyond the crisis: Workplace Pensions”.
-
Analysis
Funds lead reform calls
As Wall Street prepares to pay some of the fattest bonuses ever to its bankers and Congress remains some way from approving any substantial reform of the financial system, institutional investors such as pension funds are stepping forward to push for change – both at the political level as well ...
-
Analysis
A year of execution
The year ahead in Brussels will be one of implementing measures to tighten financial legislation. But will the financial services regulatory programme align with the plans of the G20, or be diluted under pressure from one lobby after another? Whatever the outcome, no-one should expect a bump-free ride.
-
Analysis
The sands shift
December 2009 may have marked the end of the downturn in US for the job market and retirement savings, after two very tough years. There were signs of stabilisation with companies starting to hire again, while employees who survived received statements from their pension funds that were no longer horrible.
-
Analysis
AIFM Directive delayed
Delayed scheduling in Brussels of the Alternative Investment Fund Directive — by about six months — might be bringing smiles to the faces of the anti-reform lobby. They would not mind at all that the Directive’s final clearance, through a European Parliament plenary session, is now estimated for June or ...
-
Analysis
Fund fees challenged
Mutual funds managed $1.8trn (€1.2trn), or 48%, of assets in 401(k) and other defined contribution plans in the US as of end-June 2009. Annual management fees earned were more than $10bn but these are now at risk of being cut because of two pending legal decisions. One will be made by the Supreme Court on a case about how much money-management firms can charge. The other one will be made in Congress. The House education and labour committee has already approved the 401(k) Fair Disclosure and Pension Security Act, while the Senate special committee on ageing has its own legislation.
-
Analysis
WMD under fire
Brussels is set to regulate the over-the-counter derivatives market, but it could still be some time, perhaps years, before the European Commission achieves implementation of any legislative steps across the member states.
-
Analysis
Pensions re-think
As the drive to reform private pensions in the US gathers pace, features of the UK’s forthcoming personal accounts system – which includes mandatory automatic enrolment, prohibition of fund withdrawal and the mandatory annuitisation of benefits – could be adopted in the US. One of the US lawmakers pushing in this direction is George Miller, Democrat Representative for California, chairman of the House Education and Labor Committee.
-
Analysis
The pensions professor
Teresa Ghilarducci is one of the most watched economists and pension experts these days. She is the Irene and Bernard Schwartz Professor of Economic Policy Analysis and the director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research in New York, and the author of the book ‘When I’m Sixty-Four: The Plot against Pensions and the Plan to Save Them’
-
Analysis
AIFM: "Blood and guts"
The European Commission’s proposals for its Alternative Investment Fund Managers (AIFM) directive faces a tough time as it progresses through the European Parliament, and there could be blood and guts flying during hearings in the Economic and Monetary Affairs (ECON) committee.
-
Analysis
Target date woe
Target date funds (TDF) are still the fastest growing investment option in US 401(k) plans. They have survived the recent hearings held jointly by the Securities Exchange Commission (SEC) and the Department of Labor (DOL), and the industry’s fear that they were going to be constricted by new heavy rules has waned. But investment companies and plan sponsors must better explain TDF risks to workers if they want to grow further.
-
Analysis
A golden age
“Dealing with the impact of an ageing population in the EU,” a communication from the European Commission, kicks off with the joyful view that: “For the first time in history, the vast majority of Europe’s citizens are able to lead active, healthy and participative lives well into old age.”
-
Analysis
Solvency II
The European Commission called representatives of the European pensions and insurance industry and member state officials to a public hearing in May to thrash out a harmonisation of solvency rules for cross-border company pension schemes (IORPs). But most attendees were not receptive.
-
Analysis
PBGC woes
What a difference nine months can make. At the end of last September, the Pension Benefit Guaranty Corporation (PBGC) closed its fiscal year with a deficit of ‘only’ $11bn (€7.9bn) and its director Charles Millard was busy implementing his new “less conservative” investment strategy, under which the majority of the $55bn assets was to be shifted out of bonds and into riskier stocks and alternative asset classes.
