All Opinion Pieces articles – Page 50
-
Opinion Pieces
Long-term Matters: RI talk wastes time
The time and money spent on long-term, responsible investing has not been very productive. Don’t get me wrong – we’ve made important progress and our common-sense approach to change was the right (only?) place to start. But if we can learn from experience, we could be making much deeper, faster progress.
-
Opinion Pieces
Long-term Matters: Climate a major beta risk
Last week in Istanbul, I heard the International Energy Authority’s chief economist say the world’s on track for six degrees warming by 2100. This “catastrophe for all of us” is the mother of all preventable surprises.
-
Opinion PiecesRonald Doeswijk & Laurens Swinkels, Robeco
To start this contribution on inflation, let’s open with some facts. First, central banks around the world tend to target inflation rates. In developed countries, an inflation target of 2% is not unusual. Second, since major central banks around the globe started to target inflation in the early 1980s, inflation has fallen from double-digit figures to low single digits. So, it is not that difficult to conclude that central banks’ targets are realistic and that there is hardly any reason for investors to worry about inflation in the medium term.
-
Opinion Pieces
Funds join the fray
This proxy season in the US is likely to be highly politicised, with the public sector’s pension funds playing a big role. In fact, it will be a test for several rules introduced by the Dodd-Frank Wall Street Reform and Consumer Protection Act. In addition, the 2012 presidential campaign is getting hotter, with the Republican candidates promising to repeal the Act, if elected. The Republicans already control the House of Representatives and might conquer the Senate, too. Moreover, if Barack Obama loses, the new Republican president will be able to nominate a new Securities and Exchange Commission chairman and the SEC will change from a Democratic majority to a 3-2 Republican majority.
-
Opinion Pieces
Kees Cool, Groningen University, and Anton van Nunen, Syntrus Achmea
For the first time since the introduction of the Dutch pension law in 1954, pensioners are to be told that their pensions will be cut by 3-4% from April 2013. Also, companies might be forced to pay extra contributions. The stated reason for this is the low coverage ratios of pension funds. But that this is not correct. By calculating a wrong coverage ratio, employees and pensioners are unduly and unnecessarily hurt, and economic growth is frustrated.
-
Opinion Pieces
Bankruptcy wave threat
A new wave of bankruptcies is set to put more pressure on the Pension Benefit Guaranty Corporation (PBGC), the US pension agency that insures pension benefits of private pension plans covering some 44m of America’s workers and retirees. For fiscal year 2011, the PBGC has already reported a record $26bn (€19.8bn) deficit – the largest in its 37-year history and $3bn more than the $23bn deficit reported the previous year.
-
Opinion Pieces
Long-term Matters: Stop enabling corruption
My invitation to Prague last November had one drawback. The seminar was about corporate and political corruption. How depressing. Still, invited by the liberal Brookings Institution and the conservative American Enterprise Institute and convened by a leading US ambassador, how could I refuse?
-
Opinion Pieces
Politicians vs pensions
Two strongly divergent positions concerning the European Commission’s proposals for a financial transaction tax (FTT) have emerged in Brussels. Pension fund interests vehemently oppose the tax, while other parties, including some members of the European Parliament, take a diametrically opposite view.
-
Opinion Pieces
Don’t touch Article 18
Investment rules for workplace pension funds should not be harmonised at European level. At least, this is the view aired in several responses to the European Insurance and Occupational Pensions Authority’s (EIOPA) call for advice (CfA) document on the revisions to the 2003 IORP Directive.
-
Opinion Pieces
Long-term Matters: Learning from bailouts
Why do bankers still not get their part in, to use Ken Rogoff’s phrase, the ‘Great Recession’? And what have institutional investors learned from these bailouts? An interesting CFA Institute blog shows that bailouts today are more frequent and more destructive than ever before. Unsurprisingly, the ‘why’ is deeply contested. Here’s my diagnosis to balance orthodoxy.
-
Opinion Pieces
EIOPA's draft response to the EC on Solvency II
The consultation issued by EIOPA, on its draft response to the EC’s questions about how Solvency II can be amended to apply to pension schemes, closed on 2 January 2012. EIOPA had been asked for advice on how to meet the EC’s objectives of simplifying setting up cross border schemes, modernising the prudential regulation of defined contribution schemes and enabling IORPs to take advantage of risk mitigation techniques. A key procedural objective for the EC is for a consistent regulatory structure to apply across the financial services sector, and it believes this can be achieved by adapting the principles underlying Solvency II for pension schemes.
-
Opinion Pieces
In the line of fire
The $225bn (€177bn) California Public Employees’ Retirement System (CalPERS) used to be considered a leader in setting new trends, such as investing to improve companies’ corporate governance or to achieve environmental and social goals. But today it is in the line of fire, with critics pointing to its disappointing results and pushing for big changes.
-
Opinion Pieces
Liz Murrall & Jonathan Lipkin, Investment Management Association
Much has been written about investment managers churning stocks, to the detriment of client returns, investee companies and potentially the overall stability of the economy.
-
Opinion Pieces
Hedge funds face clip
Hedge funds enjoyed record inflows in 2011 as new assets from US pension funds poured into their coffers. But it was also a horrible year for their performance and investors put a lot of pressure on them for better terms.
-
Opinion Pieces
Long-Term Matters: Executive Pay
Why should investment professionals care about the ‘#Occupy’ protests? The majority of the public – ie, our customers – share some of the protesters’ views, even if they are not on the streets. One potent driver is the huge growth in income inequality over recent decades. With this comes disgust with politicians for being the primary ‘enablers’.
-
Opinion Pieces
Fiona Stewart, OECD
Fiona Stewart, principal administrator at the OECD, considers why many institutional investors have failed to live up to their long-term investment potential.
-
Opinion Pieces
Investing for impact
“When traditional investors look at impact investing they sometimes think they have to sacrifice returns. Fortunately, there are many examples of impact investing that lead to both competitive returns and positive social impact. In fact, it can be a very competitive field of investing activities versus mainstream assets,” says Scott Budde, head of the global social and community investing department at TIAA-CREF. This is why TIAA-CREF, with $440bn (€319bn) assets, has been involved in impact investing since 2006, and socially responsible investing since the 1980s.
-
Opinion Pieces
IORP under pressure
The European Insurance and Occupational Pensions Authority’s (EIOPA) call for advice on the subject of revisions to the EU’s 2003 IORP Directive on work-place-based pensions closes on 2 January 2012. It seeks advice on the extent to which the legislative framework should be similar to that for other financial institutions and products.
-
Opinion Pieces
Long-term Matters: Musical chairs
In recent years, environmental, social and governance (ESG) teams have tried to get closer -– both intellectually and in seating arrangements – to the company’s active equity portfolio managers. And for good reason: these were the company’s stars. All this led, quite naturally, to a heavy focus on ESG alpha. ...
-
Opinion Pieces
Lans Bovenberg & Casper van Ewijk
The EU debt crisis is making further private funding of pensions more desirable. More private retirement saving is necessary to maintain income in old age when public pensions are being cut due to the crisis. Indeed, the implicit debt in the extensive pay-as-you-go (PAYG) arrangements are an important reason behind the European debt crisis. The best way to address the crisis is to cut entitlement programmes in the medium to long term, while leaving more fiscal room to cushion the economy today.
