All on the same spreadsheet
Siemens group office head office in Munich is gearing up for the end of the group’s financial year at the end of September, when the uniform asset management reporting system will come into place. All the group’s pension plans will be reporting their performance data according to a group-wide platform.
“This will enable global performance measurement data and other information to be compared on the same basis,” says Peter Scherkamp, head of finance strategies, at the group corporate finance treasury. “These online reports will have just one-day’s delay in the availability of information.” So should another September 11 crisis occur, the group’s CFO can have an up-to-date statement, down to a stock specific level.
“In addition, we can look at our pension arrangements world-wide as one virtual plan,” he says. “So we will co-ordinate with our colleagues to see the impact on group results.” This year, with the continuing down turn in markets, the information will undoubtedly be keenly awaited.
Scherkamp points out that this information is “now a major issue as the group will have to pay the bill” for any pensions assets shortfall. “This is a very critical major project for us due to the size of the liabilities the group has worldwide.” These are estimated at E19bn, with some E6bn outside Germany.
The information that comes through the system is available both locally and centrally. “This gives us the ability to look through the data in whichever way we want and to consolidate it. It gives us great transparency in putting the numbers together, as we can look through to the different asset classes, individual managers even down to stock specific level,” says Scherkamp. “The source of the information is the individual trade.”
What this means is that corporate finance can talk to the local pension fund about its results much more quickly and with much better information to hand. “The sooner we have the information we need in the way we want it, the better,” he says.
The system has been under discussion at the group international pension council, which meets twice a year. Pension, human resources, accounting and tax people are brought together to discuss isues of common interest. “There has been a lot of buy-in to the new system. The fact that we don’t claim that at
corporate finance head office we know everything better has helped create an atmosphere of trust!”
He believes that it is much better to be part of the bigger picture, than just being a local expert. “Once the complete information is there, you are both working to the same set of numbers.” The aim is to bring every unit up to the standard of the best.
Scherkamp points to how the role of selecting asset mangers is now being co-ordinated on group-wide basis, using the expertise of different parts of the group. PensionsAdvisory from SFS, Innovest- the Austrian asset management subsidiary and the US pension fund management. “These people have more expertise than others in this area.” This is available to any local fund looking to change managers.
The corporate head office works with SFS in a number of ways, particularly with PensionsAdvisory, Innovest and the Siemens KAG.
Siemens has recruited Klaus Kirschenhofer to work with Scherkamp and take over some of his areas of responsibility for asset management worldwide. Previously, he was with Wacker-Chemie in Munich as pensions investment manager.