More comment – Page 75
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Opinion Pieces
Ratings war
Two new developments in the recent rating agency drama could radically change the way pension funds manage their bond portfolios. One is the a court decision allowing the California Public Employees’ Retirement System (CalPERS), the largest state pension fund in the US, to go ahead with a lawsuit against Moody’s, S&P and Fitch, which it claims caused it to lose about $1bn (€809m) because of inaccurate ratings. The other development is the US Senate’s approval of an amendment to the financial reform proposed by Florida Republican George LeMieux and Washington Democrat Maria Cantwell to remove references to the raters from the laws governing securities and banking.
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Opinion Pieces
Worse than it looks
The forthcoming loss of Jörgen Holmquist, director general, and David Wright, deputy director-general, two of the most senior and experienced officials from the European Commission’s division responsible for legislation for the banking, insurance, free movement of capital, pensions and capital reserves sectors is bad enough. But accusations that there is a shortage of personnel preparing a “crazy number of legislative initiatives” make the losses worse in this time of crisis.
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Opinion PiecesDominique Senequier, chief executive of AXA Private Equity
“SWFs, being long-term investors with steady funding sources, will have a role to play in shaping the future landscape of private equity”
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Opinion Pieces
The state we are in
In the US, most defined benefit (DB) pension schemes are public and their members are employees of states, municipalities and other local administrations. Their future to a great extent depends on their members’ unions: if the unions refuse to accept radical reforms in order to reduce the growing fund deficits, the current funding crisis will become explosive, say two new reports by independent research institutes. The budget season and the November elections are helping to draw attention to this vital issue.
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Opinion Pieces
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 ...
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Opinion Pieces
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.
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Opinion Pieces
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.
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Opinion Pieces
Danyelle Guyatt, Mercer & Jon Lukomnik, IRRC Institute
“The problems start when so-called long-horizon managers play the short-term game”
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Opinion PiecesAnton van Nunen, Van Nunen & Partners
The first fiduciary contracts were drafted some 7-8 years ago, and now more than three quarters of externally managed Dutch pension money is under fiduciary management. It is time to evaluate the rapid development and, in particular, to correct aberrations that have occurred since.
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Opinion PiecesAutomatic 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.
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Opinion Pieces
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).
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Opinion Pieces
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”.
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Opinion Pieces
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 ...
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Opinion PiecesElizabeth Corley, CEO, Allianz Global Investors Europe
You can’t fall in love with the European single market. At least that is the considered opinion of the father of the project, Jacques Delors. However, you can celebrate its outcomes. European integration has fostered an environment that has allowed the various financial market sectors to consolidate. Today, sectors such as banking, insurance and asset management have broadened their business and extended operations across Europe, while European pension funds have largely stayed on the sidelines.
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Opinion Pieces
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.
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Opinion Pieces
Hugo Lasat, CEO, Amonis Pension Fund
“The funds industry is a good shelter for the anxious client. But this is only true on the condition that fund managers can perform their role as risk managers”
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Opinion Pieces
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.
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Opinion Pieces
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 ...
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Opinion Pieces
Will Price, International Organisation of Pension Supervisors
We live in a world of integrated markets where co-operation and cohesion of our diverse regulatory approaches is key to understanding and mitigating the impact of the global financial turmoil.
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Opinion Pieces
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.
