Länsförsäkringar Liv is not the only company struggling with guaranteed products.Its rival Handelsbanken Liv had to top up its guaranteed products with SEK16m (€1.8m), as performance failed to cover the guarantees agreed over the third quarter.The guarantees are between 3% and 5%, and, as long as interest rates remain low, the situation will remain.Handelsbanken has worked to move customers out of guaranteed products for some time now.It has SEK11bn in these types of products, SEK57bn in fund products and SEK16bn in other types of insurance products.AMF, another life and pension provider, returned 5.9% over the first three quarters, while its solvency ratio increased to 221%, up from 183% last year, putting it in a better position than many of its competitors when dealing with guarantees.Alecta, meanwhile, returned 6.6%, with a solvency ratio of 174%, compared with 134% at the same time last year.Alecta’s main pension product, Alecta Optimal Pension, returned 12% over the period.Elsewhere, the life and pensions business of SEB, the Swedish banking group, saw premiums increase by 14% to SEK23bn, with its unit-linked business assets under management at an all-time-high at SEK148bn as a result of new clients and rising stock markets.At the same time, SEB Trygg Liv Gamla, its traditional guaranteed product, returned 6.6%. The solvency ratio increased to 192% from 166%.Bucking the trend of reduced guarantees, SEB Trygg Liv Gamla increased guarantees to 7% before taxes and fees from 1 October.At the same time, life and pension business of Nordea, the Nordic banking group, saw a rise in premiums of 23%.Similarly, Swedbank Försäkring, the life and pension insurance business of the banking group, saw premium income increase by 8%, with assets under management increasing by 11% to SEK113.8bn.Its average return for fund customers was 9.6%.Lastly, PP Pension, the pension fund for the press and media, reported returns of 4.4% for the three quarters to the end of September. Länsförsäkringar Liv, the Swedish life and pension insurer, has set out to boost its solvency levels by asking its customers to agree to new contracts without guarantees. So far, only 10,000 of its 200,000 customers have agreed.Instead of guarantees, Länsförsäkringar is also now offering lower fees, a move that has increased its solvency ratio by 1.2 percentage points to 118%.During the first three quarters of the year, guaranteed product performance was down by 3.9%, while its new product with lower guarantees returned 0.8%.
Positive market developments and rising discount rates helped Swiss Pensionskassen improve their funding levels by approximately 300 basis points, consultancies estimated.PKSBB, the CHF15bn (€12bn) pension fund of Swiss federal railways SBB, fared particularly well, reporting a funding level just above the 100%-mark for the first time in more than a decade.Its 101.8% funding level marked an increase of 270bps year on year and means that, for 2014, its participants will not have to pay any additional contributions as part of a recovery plan.Meanwhile, average funding levels at Swiss pension funds improved to 102.9% for pension funds in general, according to Towers Watson, or even to as high as 110.8% for private pension funds, according to Swisscanto. The Towers Watson Pension Index calculated that the funding level increased by 400bps quarter on quarter from 99.1% as reported per end-September 2013, while Swisscanto worked out an improvement of 320bps for private pension funds and 270bps for public pension funds to 102.7% year on year.A slight increase in the discount rate also helped lower liabilities and improve funding levels in turn.Within the Towers Watson sample, the discount rate improved by 16bps, while liabilities shrank by 2%.Swisscanto reported a 6.1% average rate of return for its sample, similar to the one published by Towers Watson at 6.2%.UBS calculated a similar average return at 5.89%, but the Credit Suisse index showed a slightly lower average return at 5.75%.The PKSBB is at the lower end of the spectrum, with a return of 5.4% for 2013.In a statement, the pension fund stressed that, despite the recent improvement of its funding levels, its financial buffers were still wanting.The PKSBB is one of the funds currently looking to introduce variable pensions for future pensioners to ensure sustainable, long-term financing.
The UK’s Lancashire County Pension Fund has bought an industrial estate in the north of England through Knight Frank Investment Management (KFIM) for £7.8m (€9.7m) from Anglesea Capital and Hudson Advisors.The purchase price of the 142,220ft2 multi-let Walton Summit Industrial Estate in Preston, Lancashire, reflected a 7.3% yield, said KFIM.The estate is occupied by chemicals manufacturer Evans Vanodine, courier company Yodel and brewing equipment firm Three Nations.Lewis Ellis acted for KFIM in the deal, and CBRE represented the seller. Meanwhile, HSBC Life (UK) – a subsidiary of the HSBC Holdings group – is selling its UK pensions manufacturing business to Admin Re Group, part of the Swiss Re Group.A spokesman for HSBC said the sale was part of the bancassurance strategy HSBC Holdings had been following for the last few years, aimed at simplifying the business and deploying capital more effectively.The UK subsidiary will continue to offer pension products, but no longer package them itself, he said.Under the terms of the transaction, HSBC will sell its corporate and individual pensions policies, and an associated annuities book.Around £4.2bn of underlying assets under management formed part of the deal, and about £4bn of this was managed by HSBC Global Asset Management (UK), the group said.HSBC Global Asset Management will continue to be the investment manager of these underlying assets.The deal also included a reinsurance agreement with ReAssure whereby HSBC has transferred certain economic risks and rewards of the business to ReAssure from 1 January 2014 until the deal completes.The transaction is subject to regulatory and law court approvals and is expected to complete in the second half of 2015.
The largest asset owner signatory, the $191.4bn California State Teachers’ Retirement System (CalSTRS), said that water management could have a “material impact” on portfolio value.Referencing the ongoing drought hitting the western US, the fund’s director of corporate governance, Anne Sheehan, said: “In California, we are keenly aware of how water scarcity can impact lives and businesses, as our state struggles to manage a depleting water supply.”Hervé Guez, director of research at asset management signatory Mirova added: “Better disclosure of water risks is the first step, but ultimately we’d like to see the companies in our portfolios moving from risk to opportunity with innovative water management strategies.”Water management has gradually risen in prominence as a matter to be tackled by institutions. Sweden’s AP4 in July tendered a water scarcity equity mandate.Additionally, investors including the Norwegian Government Pension Fund Global and the California Public Employees’ Retirement System have previously spoken of the advantages of greater transparency over water management, and asset owners have been urged to set a more proactive tone when engaging over water risk.Read more about why asset owners should monitor water risk,WebsitesWe are not responsible for the content of external sitesLink to letter organised by US Interfaith Center on Corporate Responsibility Investors worth $2.6trn (€2.3trn) are urging over a dozen of the world’s largest food companies to better assess risks associated with water management, stemming both from direct operations and supply chains.Backed by 60 institutions, including the £5bn (€6bn) Northern Ireland Local Government Officers’ Superannuation Committee (NILGOSC) and BT Pension Scheme-owned Hermes Investment Management, the letter urged companies to tackle the risks it argued were having a “profound near-term business impacts”.It added that the risks could increase capital expenditure and operating costs, thus putting future revenue at risk.As a result, it asked for the firms – including Kraft Heinz, Fresh Del Monte Produce and drinks manufacturer Dr Pepper Snapple – to disclose if the board was responsible for water management and what steps were taken to monitor the water usage of suppliers.
Prentis cautioned against a wholesale divestment before other assets were available.“Divesting of carbon assets without having found adequate alternative renewable investment returns would create huge economic uncertainty.”He argued that low-carbon investment opportunities in the UK remained limited and were often not of sufficient scale, with investors incurring “high fees and huge transaction costs”.Prentis also evoked cost as a concern when arguing against divestment, insisting that any moves would take several years and see the affected LGPS incur “considerable” costs.The Norwegian Government Pension Fund Global was ordered in May to sell its stake in companies that derived over 30% of their revenue from coal.It came weeks after the sovereign wealth fund said it had already halved its exposure to thermal coal, and was the result of a vote by Norway’s parliament.However, divestment has previously proven difficult for the UK’s LGPS, consisting of 101 schemes managed by local authorities, as legal advice instructed them they could only divest in cases where it did not risk “material financial detriment” to the schemes.The Lothian Pension Fund in July ruled out divestment, citing both cost concerns and uncertainty on how fossil fuel companies should be defined. Those calling for pension funds to divest their fossil fuel holdings do not understand the “huge task” facing the schemes in divesting carbon-intensive companies, the head of one of the UK’s largest unions has argued.Unison said efforts by campaign groups urging asset owners to divest fossil fuel holdings were “admirable”, but underestimated the cost and complexity of selling the stakes.Dave Prentis, the union’s general secretary, said: “We all want to live in a greener, cleaner world, but pulling local government pensions fund investments from firms with big carbon footprints, and putting them into environmentally-friendly investments instead, is no mean feat.”His comments came in response to NGOs including Friends of the Earth detailing the fossil fuel investments of local government pension schemes (LGPS) to coincide with a report that found over 400 asset owners worth $2.6trn (€2.3trn), ranging from foundations and pension schemes to sovereign wealth funds, had pledged to divest their holdings.
Using a slightly different methodology, Aon Hewitt placed the figure at 99%.Mercer attributed the recent funding drop almost entirely to falling interest rates.At the end of last week, global equity markets remained more or less at the levels seen at the end of June, when they had almost fully recovered from the initial losses following the Brexit referendum.Meanwhile, Dutch regulator De Nederlandsche Bank (DNB) confirmed that three pension funds must begin discounting pension rights this year due to their precarious financial position.The regulator assessed the recovery plans – where schemes spell out how they expect to raise funding to the minimum of 105% within 10 years – of more than 180 of the 300-odd pension funds in the Netherlands.The regulator did not name the three pension funds involved but said about 9,000 workers and 500 pensioners would be affected by the rights cuts.Jetta Klijnsma, state secretary at the Ministry for Social Affairs, previously estimated that 27 pension funds, if they failed to improve their funding position by year-end, were facing rights cuts next year. Falling interest rates are piling pressure on Dutch pension funds, with Mercer and Aon Hewitt estimating that average coverage ratios dropped by a full 2 percentage points to 94% over the first week of July.At the beginning of this year, Dutch schemes’ day-to-day funding stood at 104% on average.Over the first week of July, the 30-year swap rate – the main criterion for discounting liabilities – fell from 0.88% to 0.70%, increasing liabilities by 3-4% on average, according to Mercer actuary Dennis van Ek.As of the end of June, Dutch pension funds’ ‘policy funding’ – which estimates average funding over the 12 months’ previous and is the main criterion for rights cuts and indexation – stood at 100% on average, according to Mercer.
According to the ECB, the idea behind the regulation was to help plug a “data gap” that makes it difficult to build “a comprehensive understanding of cash flows and the risks associated with pension obligations”.It argued that more data would increase transparency about pension funds’ activities, making it easier “to check if they are fulfilling their promises to citizens”.Other benefits, the ECB said, were that more public data could improve comparability and disclosure of pension funds’ obligations, and pave the way for new research on topics such as the impact of pension funds on the economy.Information potentially of interest to the ECB includes data on pension funds’ “outstanding amounts” and transactions broken down by country, economic sector, maturity, the type of pension plan, and detailed security-by-security reporting.The German regulator announced the ECB’s plans last year, but this week’s news could trigger fresh concerns about the introduction of a standardised risk assessment previously recommended by EIOPA (its “common framework”) and, ultimately, the Holistic Balance Sheet.EIOPA is keen to explore further the potential impact pension funds may have on financial stability.The ECB’s former president, Jean-Claude Trichet, has previously described pension funds as having “the potential to significantly disrupt the smooth functioning of the financial system” and playing “a key role for the provision of future income for households”.The new regulation would enhance the volume and quality of available data for studying the macro-financial effect of pension funds, according to the ECB. New ‘short-term approach’ statsThe ECB already collects data on pension funds, but this is done under a “short-term approach” that relies on existing data sources, mostly supervisory authorities, rather than requiring pension funds themselves to report data directly.On Tuesday it released new statistics on pension fund and insurance company assets and liabilities. They show the sectors separately and in more detail, with the ECB saying they result from “enhanced data collecting frameworks”.The ECB is planning to add more granular data in 2017, and publish information on a “more timely” basis than before.It said the new statistics replaced non-harmonised euro area pension fund statistics that it previously published.The statistics can be found here. The European Central Bank (ECB) wants pension funds to report harmonised data to it in a bid to gain better insight into the sector’s potential macro-financial impact.According to information from the ECB, it is planning to launch a public consultation on regulations sometime this summer, and to adopt the regulation towards the end of the year.The harmonised statistical reporting required by the regulation would start in early 2019.The pending regulation will be based on a proposal developed by a task force led by the Deutsche Bundesbank and including members from national central banks, the OECD, and the European Insurance and Occupational Pensions Authority (EIOPA), among other institutions.
A Swiss pension fund is seeking ideas for a factor-driven global developed market equities strategy and has set out its thinking on IPE Quest’s pre-request for proposal platform.According to IPE Quest Discovery search DS-2523, the pension fund is contemplating allocating between CHF200-400m (€179-358m).The strategy should remove downside risk from the global equity allocation.“The desired strategy will show an asymmetric return pattern versus the market average with high relative returns in bear markets, market equivalent or similar in moderately positive returning markets and low relative returns in strongly positive returning markets,” said the pension fund. It is open to a pooled mandate or segregated account. All stated returns should be gross of fees.Interested parties should have a track record of at least five years and submit ideas by 15 April, at 5pm UK time.Brunel Pension Partnership, one of the eight asset pools created by UK local government pension schemes, recently awarded a £400m (€467m) low-volatility global equity mandate.The IPE news team is unable to answer any further questions about IPE Quest, Discovery, or Innovation tender notices to protect the interests of clients conducting the search. To obtain information directly from IPE Quest, please contact Jayna Vishram on +44 (0) 20 3465 9330 or email [email protected]
Champion hurdler Sally Pearson and husband Kieran have sold their Helensvale home.THE home of star hurdler Sally Pearson has sold after less than a month on the market.A local family snapped up the acreage estate at Helensvale on the Gold Coast days after it was listed in January.Marketing agent Julian Porter, of Harcourts Pacific Pines, would not reveal the sale price as the deal was yet to be settled, but said it was “very close” to the $1.199 million asking price.The house is on a 4006sq m block.Inside the Helensvale home.He said it went under contract 10 days after it hit the market before going unconditional last week.“I had a heap of interest in the property both from local and interstate buyers,” he said.“I had more than 30 groups of buyers inspect the property and many of them are still looking to purchase something similar.“The $1 million to $2 million price point is very active at the moment.”Property records show Pearson and her husband Kieran bought the property in 2015 for more than $900,000.More from news02:37International architect Desmond Brooks selling luxury beach villa12 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days agoPearson and her husband own one other property on the Gold Coast.The house has been renovated since the Pearson’s bought it in 2015.It has two residences and a pool.Mr Porter, who helped the Pearsons sell their Pacific Pines home in 2015, said everyone was happy with the result.“Kieran and Sally did an outstanding job presenting the property for sale and it has been an absolute pleasure to assist them again,” Mr Porter said.MORE NEWS: Coast apartment project fast-trackedMORE NEWS: Fancy your own oasis?Property records show Pearson, who is known for leading a private lifestyle away from the track, owns one other property with her husband on the Coast.The Helensvale State High School product has long led Australia’s athletics charge, winning a gold medal in the 100m hurdles at the 2012 London Olympics.She was forced to withdrawn from the Gold Coast Commonwealth Games last year because of injury.Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:51Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:51 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD576p576p432p432p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenStarting your hunt for a dream home00:51
[email protected] A $4.725 million deal has been penned for 19 Hedges Ave, Mermaid Beach. There’s been another eye-watering multimillion-dollar sale for a beachfront house on the Coast’s illustrious ‘Millionaires’ Row’. The Mermaid Beach property, which was in need of an update, fetched a staggering $4.725 million last week. The three-level, five bedroom home on Hedges Ave was bought by a Gold Coast-based family seeking a slice of the high life. MORE NEWS: Gold Coast tenants forking out up to $4000 a week in rent Mermaid Beach is the Gold Coast’s priciest suburb. Mermaid Beach has a $1.385 million median house price making it the Glitter Strip’s priciest suburb, according to CoreLogic data. It is also one of Queensland’s top 10 most expensive suburbs to buy a house. “It’s such a testament to Mermaid Beach and the lifestyle it has to offer — board shorts and thongs, the relaxed lifestyle everyone seems to be attracted too,” Mr Stevens said. “Currently I have two to three high-net-worth individuals on my database who are waiting for me to find another beach house to purchase at Mermaid Beach.” CoreLogic data shows 19 Hedges Ave hit the market in November with a negotiable $5.595 million price tag. It last sold in June 2009 for $4.75 million. The sellers were a Brisbane couple who used it as a holiday home. Harcourts Coastal Broadbeach agent Tolemy Stevens said the buyers were looking forward to enjoying the relaxed beachfront lifestyle they have always wanted. “I’m led to believe they will be doing some sort of update and renovation to ensure it suits their family the best it can and to add a little bit of value to the property, which is always nice,” he said. More from news02:37International architect Desmond Brooks selling luxury beach villa11 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days agoIt was in need of an update. Mr Stevens said the sale proved the appetite of buyers for prestige real estate had not wavered despite cooling conditions in property felt across the country. “It’s fantastic to see another robust sale on the beachfront of Hedges Ave, proving it is still one of the most sought-after streets in the country,” he said. “While the Sydney and Melbourne markets seem to be having their own challenges, we are seeing a lot of those high-net-worth individuals deciding to look at blue chip real estate on the Gold Coast, in particular Mermaid Beach, instead of choosing to reinvest in their own backyard. “The demand is still outweighing the supply for luxury beach houses on Hedges and Albatross avenues.” Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:37Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:37 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD432p432p270p270p180p180pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenWhy moving to a ‘sister suburb’ can save you money00:37 The beachfront lifestyle. The five-bedroom house sold to a local family. 5/3531-3533 Main Beach Pde, Main Beach, also sold in an eye-watering deal for $5.5 million. Another hefty sale was settled last week for a three-bedroom skyhome in Main Beach’s Sea building.The $5.5 million sale of 5/3531-3533 Main Beach Pde follows the record-breaking price which was paid for the building’s penthouse at No. 7, which sold for $8.25 million in February. The three-bedroom apartment at No. 5 featured an open-plan design, a home office, gourmet kitchen and a wrap around balcony with water views. MORE NEWS: Gold Coast home charms house hunters with its character