International

Dutch pension fund ABP said it will cut down on debt investments, which currently make up about 40 percent of its portfolio, and switch to assets that offer a better inflation hedge. A spokesman for ABP, the world’s third biggest state pension fund after those of Japan and Norway with 205 billion euros ($325 billion) in assets, declined to say which assets ABP was looking at or to which percentage it wants to cut debt investments.

ABP, which aims to offer inflation-hedged pensions to more than 2 million civil servants and retirees, reported on Thursday a 5 percent negative return on its investments mainly due to losses on stocks and said it was worried about rising inflation.

The return on investments over the first half of 2008 was -5.1%. As a result, ABP’s assets decreased to € 205 billion. The value of the nominal pension liabilities remained relatively stable at € 155 billion. The coverage ratio at the end of the first half of 2008 was 132%.

In spite of the major shocks experienced by the equities markets, the effect on ABP’s investment portfolio was relatively limited. This was due primarily to the effective diversification within the fund’s investment portfolio and the good results for most of the alternative investment categories.

Reuters / ABP Press Release

The California Public Employees‘ Retirement System, the largest U.S. public pension fund, said it lost 2.4 percent in the 12 months ended June 30, as stock declines caused its worst performance in six years. The performance of the fund, with $239 billion in assets, compared with a 19 percent gain in the previous fiscal year. Calpers, as the fund is known, said its stock portfolio lost 10.7 percent.

Merrill Lynch in a June report said public pension funds are expected to lose on average 5.1 percent, mostly because of lower global stock prices triggered by turbulence in the credit markets. The Standard & Poor’s 500 Index of stocks declined 15 percent during the fiscal year, while the Dow Jones Industrial Average fell 16 percent. The MSCI World Index, excluding the U.S., was off 9.7 percent.

Bloomberg

The ethical policies of the Norwegian Government Pension Fund – Global may be cited as the ‘gold standard’ abroad, but the fund has no intention of resting on its laurels. As the government begins its review of the NKr2,053.1bn (€255bn, $400bn,) fund’s already robust ethical guidelines, it is seeking advice from all over the world.

One suggestion is to expand beyond the current negative exclusion policy to screen positively for the “best” companies to invest in. Another is to make a specific allocation to investments that help fight climate change, and a third to build closer ties between the body making exclusion decisions and the investment division seeking to work actively with companies on corporate governance issues.

FT

The California Public Employees‘ Retirement System, the largest U.S. public pension fund, may sell part of its $2 billion in residential land holdings after the investments lost 31 percent last year amid falling home prices and forecasts of further declines. Vacant land intended for housing is losing value as new home sales drop to the lowest in 17 years. The 10 largest homebuilders reduced their land holdings by 39 percent at the end of 2007. Demand for new homes may not revive for two or three years amid a supply glut, according to a report last month by RREEF Research, a unit of Deutsche Bank AG.

Bloomberg.com: Worldwide

The top 100 U.S. corporate pension plans in aggregate were overfunded for the second year in a row, according to Pensions & Investments‚ review of annual reports. The plans had an aggregate funding surplus of $111.1 billion in 2007, based on projected benefit obligations, up from $37.3 billion in 2006. In 2005, the 100 plans were underfunded by $50.6 billion; in 2004, they were underfunded by $69.5 billion.

Of the top 100 plans, 64 had funding surpluses at the end of 2007, a 42.2% increase from 2006. At the height of the corporate pension funding crisis in 2002 — when the top 100 plans were underfunded by an aggregate $151 billion — there were only 14 plans with funded ratios over 100%.

Pensions & Investments

In 2008, the EC plans to review how Member States have implemented the provisions of the Pensions Directive. In advance of this review, the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) has published the findings of its own review of this matter. Separately, the UK Government also consulted on its implementation of the cross-border provisions of the Directive. That consultation ended in December 2007 and its response has finally been published.

CEIOPS has also published the findings of a survey it conducted on different Member States’ funding requirements. Later this year (possibly in July), the Commission plans to consult on how (if) to apply a common solvency standard to pension funds. The CEIOPS’ report should help inform that consultation.

The main points of interest from the three publications in this Watson Wyatt survey.

Watson Wyatt Worldwide, Pensions News Filter

Scottish Widows faces a compensation claim for up to £1bn after allegedly giving negligent advice to about 100 company pension schemes. The firm, which is owned by Lloyds TSB, has been accused of encouraging the schemes to give up guaranteed returns and protections against the risk of pensioners living for longer than expected.

According to an independent consultancy, the Actuarial Review Company (Arc), the pension funds‘ trustees were advised to switch investments from guaranteed deferred annuity funds into a Scottish Widows managed fund with a high exposure to shares. The moves, made in 1999 and 2000 at the height of the dotcom boom, saw the investments give up a guaranteed return of about 7% a year and removed protection for the funds from improved lifespan projections, which have led to much higher pension scheme costs.

Pension funds | Money | The Guardian

Nicolas Sarkozy will die Franzosen mehr arbeiten lassen und das generelle Rentenalter von 58 auf 60 erhöhen. Ein besonderer Dorn im Auge des Präsidenten sind dabei die Sonderprivilegien (les régimes spéciaux) gewisser Berufsgruppen – etwa der Angestellten der Staatsoper. Diese gehen so früh in Rente wie sonst niemand in Frankreich. Für die 1680 Angestellten der Pariser Staatsoper gilt ein 310 Jahre altes Dekret des Sonnenkönigs Louis XIV. Dieses bestimmt, dass die Tänzer mit 40, die Sänger mit 50 und das technische Personal mit 55 Jahren in den Ruhestand treten dürfen.

Mit 40 in Rente / International / SF Tagesschau

PVL-Präsident Thomas Klaus zu den Vor- und Nachteilen der staatlichen Pensionsversicherung Liechtensteins: «Die Staatsangestellten können jederzeit sicher sein, für das Alter vorgesorgt zu haben. Für diese Sicherheit nehmen sie gegenüber der Privatwirtschaft auch höhere Beiträge in Kauf.» 

Liechtensteiner Vaterland

Die polnische Regierung will in den nächsten vier Jahren 740 Firmen aus allen Branchen privatisieren. Die Verkäufe sollen 30 Milliarden Zloty (rund 14 Milliarden Franken) in die Staatskasse spülen. Knapp die Hälfte davon soll in einen Renten-Garantie-Fonds fliessen und den drohenden Kollaps der Pensionskasse abwenden. Denn auch in Polen werden schon bald die so genannten geburtenstarken Jahrgänge ins Rentenalter kommen.

Polen verkauft 740 Staatsunternehmen –

Leaders from Mercer’s retirement and investment consulting businesses that specialize in defined contribution plans gathered from around the world in New York in March of this year. To take advantage of having their global DC consulting leaders together, Mercer produced a three-part video series in a panel format that is entitled, “Defined Contribution Retirement Plans Around the World.» 

The three 15-minute segments are: Part 1:Moving to DC – An Overview of the Defined Contribution Landscape; Part 2: Is the DC World Flat? – International Perspectives on Defined Contribution Investments; Part 3: It’s All about Your Employees – Global Trends in Engaging DC Plan Members.

Video: DC Retirement Plans Around the World

Dutch pension fund participants will be able to find details of a member’s combined pension rights on one website within two years. One push of a button and it will be possible to view the total pensions claims an employee has built up during his or her entire working life, the newly-founded Stichting Pensionregister has claimed.

Dutch pension register to arrive in two years