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Financial crisis has been good for pension funds, says Amonis

IPE AWARDS - The recent financial crisis has been good for pension funds, the chief executive of Amonis said during a panel at the IPE Awards seminar in Monaco.

Speaking during a discussion on the level of optimism in the industry regarding the future, Hugo Lasat said the crisis, which he believed could continue into next year, had put issues of pension fund management in the spotlight.

“That is very good because it has a macroeconomic impact - for instance, on consumer confidence, which is fairly significant,” he said. “It makes me feel confident in the long term because it is high on the agenda.”

However, Lasat also highlighted Solvency II as something that left him very worried, calling for proportionality rather than a simple duplication of existing solvency regulations.

The uncertainty was echoed by attendees of the seminars, with a poll showing two out of five attendants not positive about the future of pension funds.

Panelists raised the issues of longevity, as well as the lack of funded pensions in countries such as France, as problems the industry faced.

Charles Vaquier, chief executive of UMR Corem, said the shift to a funded pension system would take several decades to agree.

“There will be room for funded pensions,” he said. “The first question is, ‘Can employers and employees agree on that?’. As usual, in France, it will take years - it will be decades.”

He also raised the issue of whether his country’s economy would be strong enough to support the additional pension system, saying he expected pension funds would have to follow in the footsteps of other European countries and reduce the level of payments to members to survive.

Michael Taylor of the London Pension Fund Authority singled out the issue of longevity as one that made him pessimistic about the future continuation of pensions.

He said members in his fund on average lived until 89, with his oldest pensioner 109 years old and almost 50 centenarians drawing payments.

“Now that is a reason for optimism and pessimism,” he said. “Pessimism as far as running the funds is concerned - how on earth are we going to pay these people all this in future?”

He jokingly added that he was also optimistic, as he had been enrolled in a pension scheme all his life and was approaching retirement himself.

“Hopefully, I have that life expectancy in front of me,” he said.

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