Mercer has claimed the new guidelines on IAS19 accounting standards will accelerate a trend to de-risking amongst UK pension fund. David Fogarty, a worldwide partner in Mercer’s Financial Strategy Group, said the change would force companies to consider where to position their funding targets and the extent to which they should be taking investment risk with their pension plan.
International
Institutions continue to drop U.S. equities
As the U.S. equity markets climb to new heights, it seems that a growing number of institutional investors prefer to put their money elsewhere. U.S. equity strategies experienced major outflows, according to a new study by strategic consulting firm Casey Quirk & Associates LLC. Roughly $105 billion in total assets poured out of domestic equity products during the year ended March 31.
This is the largest total one-year outflow from U.S. equity strategies since Darien-based Casey Quirk began its study of institutional flows in 2002. The outflow also marks the second consecutive year of negative flow from U.S. equities, with a total of $135 billion moving out since the beginning of 2005.
Institutions continue to drop U.S. equities – Pensions & Investments
Lehrer-PK von Ontario führt grösste kanadische Unternehmensübernahme an
Der größte kanadische Telekom-Konzern BCE Inc. (Bell Canada) wird für 51,7 Milliarden kanadische Dollar (35,8 Mrd Euro) verkauft. Bei dem Geschäft handelt es sich um die größte Übernahme eines kanadischen Unternehmens überhaupt und um die weltgrößte Privatinvestoren-Akquisition, die es je gegeben hat. Käufer ist ein kanadisch-amerikanisches Privatinvestoren- Konsortium unter Führung der Lehrer-Pensionskasse Ontario Teachers Pension Plan.
FTD.de – Industrie – Nachrichten
Watson Wyatt: Global Alternatives Survey 2007
The Global Alternatives Survey 2007 is conducted annually by Watson Wyatt Investment Consulting for Global Investor. This year it polled 112 investment managers globally to determine the size of assets managed on behalf of pension funds at 31/12/06 across four alternative asset classes. In private equity and hedge funds, the survey is focused purely on fund of funds. For real estate and commodities direct funds are included. The survey is based on data received from investment managers and where they were not able to account separately for assets managed on behalf of pension funds they had to be excluded from the ranking.
Watson Wyatt Europe – Ideas & Research | Research Reports
Pension Governance Offers Webinars for Pension Fiduciaries about Hedge Fund Valuation
Financial statistics show that pension plans now outpace high net individuals with respect to hedge fund investing. At the same time, sub-prime funds struggle in the aftermath of blow-ups such as Amaranth and Bayou. Additional complexity forces pension fund decision-makers to ensure that their due diligence is rock solid, arguably more so than ever before.
In an effort to assist plan sponsors, Pension Governance, LLC continues its Hedge Fund Toolbox(SM) series with two more online events this week. Join pension plan decision-makers for a lively discussion about the role of the pension consultant (June 26, 2007) and proper valuation policies and procedures (June 28, 2007).
How fund managers vote… at a glance
Savers and pension fund managers can now find out how the fund managers who look after their savings are casting their votes in controversial decisions at company AGMs, thanks to Open Vote, a new searchable database available on the TUC website (at www.tuc.org.uk/openvote ).
Bond story overlooks US strength
Probably the single most important number in the global economy is the long-term rate of interest established by the so-called “benchmark” yield on the ten-year US government bond. This number, which shot up from 4.7 per cent three weeks ago to 5.3 per cent last Tuesday, largely determines the level of long-
The pressure on pension funds to abandon profit-maximising investment management is still growing. If anything, the stampede into bonds will be intensified by the latest increase in interest rates, which, combined with the rise in global stock markets, has returned many pension funds to technical solvency.
Ständerat stimmt Anschluss Liechtensteins an Sicherheitsfonds zu
Der Ständerat als Erstrat hat dem Anschluss der liechtensteinischen Pensionskassen an den schweizerischen Sicherheitsfonds mit 29:0 zugestimmt. Damit folgte der Ständerat der Empfehlung seiner vorberatenden Kommission. Die Vereinbarung zwischen dem Bundesrat und der Regierung in Vaduz betreffend die Wahrnehmung der Aufgaben des liechtensteinischen Sicherheitsfonds wurde am 19. Dezember 2006 von Regierungschef-Stellvertreter Klaus Tschütscher und Bundesrat Pascal Couchepin in Bern unterzeichnet. Das Abkommen ist bereits seit Anfang 2007 in Kraft, wegen der bisher noch nicht abgeschlossenen Ratifizierung allerdings erst provisorisch.
P&I: Top 100 US plans fully funded
The top 100 U.S. corporate pension plans in aggregate were fully funded at the end of 2006, a major reversal from past years, Pensions & Investments’ review of annual reports shows.
In dollar terms, the largest 100 plans showed an aggregate $37.5 billion surplus, based on projected benefit obligations, the first surplus since P&I began tracking annual reports in 2002. In 2005, the largest 100 were underfunded by a total of $50.6 billion; in 2004, they were down by $69.5 billion.
Significantly higher investment returns were the largest factor in improved funding. The Russell 3000 index, for example, returned 15.72% last year, vs. 6.12% in 2005.
Top 100 plans fully funded – Pensions & Investments
UK: "Private equity stole our pensions"
Can workers in 21st-century Britain have their pensions stolen from under their noses? This is exactly what the GMB union says has happened to hundreds of thousands of employees of companies that collapsed after being bought by private equity firms.
‹Private equity stole our pensions› | Business | The Observer
People will need to save more as reforms cut pension promises, says OECD
People in OECD countries will have to save more for their retirement as a result of the major pensions reforms carried out in recent years, according to a new OECD report. The average pension promise in 16 OECD countries studied was cut by 22%. For women, the reduction was 25%.
Pensions at a Glance 2007 notes that in only two countries, Hungary and the United Kingdom, did pension promises increase on average. In France, Germany, Italy, Japan and Sweden, future benefits will be cut by between 15 and 25% and in Mexico and Portugal by over 30% from what people would have been entitled to before the reforms.
The impact on workers varies widely across the OECD. Several countries moved towards greater targeting of benefits on poorer pensioners, notably Mexico, Portugal and the United Kingdom. Austria, France, Germany and Sweden also protected low earners.
OECD
Vergleichstabelle (xls)
NZZ
US: Divestment focus shifts to Iran
Public pension funds across the country are battling state legislation that would require them to divest from companies doing business in Iran — a set of securities that could comprise up to 25% of the MSCI EAFE index. If some of the bills are passed in their broadest forms, institutions might be forced to sell nearly $18 billion in affected assets. Federal law prohibits most U.S. companies from doing business in Iran, and the bills being introduced now focus on foreign-based firms. However, some state legislatures are paring the reach of their bills to focus solely on energy-related stocks, which greatly reduces the amount and number of stocks that would have to be sold.
Link to Pensions & Investments
California’s teacher pension fund faces $19B shortage
The California teacher pension system faces a $19.6 billion funding gap during the next three decades, despite three years of strong investment returns, according to a new report. That means teachers, school districts and the state will need to boost contributions to the nation’s second-largest public pension system, the actuarial consulting firm Milliman reported.
The funding gap is narrowing for the California State Teachers› Retirement System and the nearly 800,000 teachers it covers, the report said. The long-term deficit was projected at $24.2 billion as recently as 2004, but double-digit investment gains reduced the expected shortfall. With $168 billion in assets, CalSTRS can cover 87 percent of its pension obligations, up from 82 percent in 2003, the firm said. That is nearly at the current average of 88 percent coverage for 125 state retirement systems surveyed this year by Wilshire Consulting.
The McKinsey Quarterly: An Interview with the President of the Chilean Pension Reform System
In this interview, Mario Marcel, chairman of the government commission whose recommendations formed the basis of the draft legislation, explains why Chile’s defined-contribution system will be one component of a wider pension regime in the future. He describes the likely impact of the proposed changes, the lessons for the outside world, and some of the challenges yet to come.
Link to The McKinsey Quarterly.
The McKinsey Quarterly: An Interview with the President of the Chilean Pension Reform System
In this interview, Mario Marcel, chairman of the government commission whose recommendations formed the basis of the draft legislation, explains why Chile’s defined-contribution system will be one component of a wider pension regime in the future. He describes the likely impact of the proposed changes, the lessons for the outside world, and some of the challenges yet to come.
Link to The McKinsey Quarterly.