More comment – Page 54
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Features
Hill’s grilling on an open fire
After two hearings and nearly six hours of grandstanding and deflection, rhetorical and leading questions, the European Parliament in October approved Jonathan Hill’s appointment as financial services commissioner.
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Opinion Pieces
Guest viewpoint: “Macro matters. We ignore it at our peril”
Open a newspaper. Any newspaper. Read the front page and then the business pages. Absorb, assimilate, repeat. After half a dozen goes, you may notice a pattern.
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Opinion Pieces
Letter from Brussels: Capital market union
The capital market union (CMU) is a new emphasis in Brussels and Jonathan Hill, the new Commissioner for financial services, mentioned the subject repeatedly at his initial vetting by MEPs.
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Opinion Pieces
Letter from the US: Pensions and start-ups
Can pension funds play a greater role in stimulating start-ups and economic growth? Some US politicians think so and are trying to deploy public retirement assets for this goal. But critics claim that results have been disappointing so far, mostly because pension funds invest through private equity funds that demand very high fees. So a new idea is gaining support – pension funds investing directly in private companies, cutting out intermediaries.
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Features
The ‘what’ and ‘why’ of costs
Controversies around pension funds’ asset management costs in various countries tell us something about the mood of the times, but they also suggest that changes are needed in the way pension boards select and justify their strategy choices to members and the wider world.
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Features
Divergence trades, depression trades
“It’s one of our big themes,” said Kathleen Hughes, head of European institutional sales at Goldman Sachs Asset Management, talking about central bank policy divergence over meet-the-press drinks in early September, four hours after European Central Bank president Mario Draghi had taken the deposit rate further into negative territory and announced plans to purchase covered bonds and asset-backed securities. The euro had a terrible day; Goldman Sachs had a pretty good one.
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Features
No rush for auto enrolment
As part of their commitment to turn around their economies, Spain and Portugal have tackled pension issues, both by reducing expenditure and by taking the first steps towards making retirement systems fairer and more efficient.
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Features
Pensions in the picture
Just three years after Europe’s pension fund representative bodies were successful in their proposal to create a separate occupational pensions stakeholder group within the European Insurance and Occupational Pensions Authority (EIOPA) – under the previous CEIOPS committee of pension and insurance supervisors a single stakeholder group covered both sectors – there is now a proposal to merge the two stakeholder groups. Although this will have to be ratified by the European Parliament, here are a few points that might help those involved understand why this issue really matters.
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Features
The high stakes of stakeholder group reform
Changes to the governance and funding structure of the European Insurance and Occupational Pensions Authority (EIOPA) now seem inevitable, after it was adopted as one of the core policies for new European commissioner Jonathan Hill.
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Features
The UK regulator has got its teeth back
Champagne corks were popping back in August near the UK’s south coast when Brighton-based UK Pensions Regulator (TPR) ended a six-year legal battle with the insolvent Lehman Brothers.
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Opinion Pieces
Crony capitalism
The public gets it. Academics and financial analysts get it. In fact, many experts say it is the most important governance and democracy issue of our time. So why do investors have so little to say about political donations and the corporate capture of politics?
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Opinion Pieces
“Governance can serve as a stimulus to improve and nurture pension organisations”
Once a year, the US professional basketball league organises its all-star competition. Players from teams across the country are selected as the best in their respective positions. Could we have an all-star pension industry, uniting the best standards and practices under one roof?
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Opinion Pieces
Woody at work
Woody is the villain of the new book The US Pension Crisis – What We Need to Do Now to Save America’s Pensions, by Ronald Ryan. According to Ryan, Woody is the “pension pencil” or “the weapon of mass destruction in financial America”, used since the 1990s for accounting gimmicks that conceal the real financial situation of pension funds.
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Opinion Pieces
A stinging rebuke
The private pension product sector is “persistently the worst-performing retail services market of all throughout the European Union”, according to the European Commission, as cited in a new report.
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Features
DC plans in search of credibility
Worldwide, diversity increasingly characterises defined contribution (DC) schemes. There are employee-managed plans in Hong Kong, Japan, the UK and the US. There are trustee-led plans in Australia, Brazil, Chile, continental Europe and South Africa. There are state-supervised DC plans in China, India, Malaysia and Singapore.
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Features
Collective lessons from professionals
Experience shows that the benefits of intergenerational solidarity and collective pension risk sharing are often not appreciated, particularly by those who feel they are shouldering a greater share of the burden than they ought.
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Opinion Pieces
Learning disabilities
Who would invest in a sector that has lagged the Stoxx 600 by 1.1% in overall growth and by 0.3% in EPS growth for the last 19 years on an annual basis?
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Opinion Pieces
“The best CDC design is collective implementation with clear ownership rights”
Designing a robust retirement income solution is not easy – as with most complex issues, there are no silver bullets, only trade-offs. The challenge is to balance life-long retirement income stability with financial risk-taking, all within a framework that is understandable, transparent and fair and hence can be trusted by members.
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Opinion Pieces
Rethink on alternatives
After five strong years in the equity markets, some US pension funds are disappointed by the performance of their alternative assets and moving out, while others are keeping them but focusing on de-risking.
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Features
Time for trusteeship
Senior staff at China Investment Corporation (CIC) are talking about investment governance these days, reflecting growing recognition of the importance of sound non-executive or supervisory board oversight for all kinds of entities, be they global companies, sovereign wealth entities or pension funds.
