PFZW, the €137bn pension fund for the Dutch healthcare industry, will conduct a “very extensive” review of its recent divestment from five Israeli banks, according to its director, Peter Borgdorff.The pension fund has faced widespread criticism for the controversial decision, including allegations of pro-Palestinian bias. In early January, PGGM – the manager responsible for PFZW’s assets – announced that it planned to divest from the banks over their involvement in the financing of Israeli settlements in the “occupied Palestinian territories”.PGGM spokesman Maurice Wilbrink confirmed that the manager initiated its engagement with the banks, a process that led to their divestment, specifically at PFZW’s behest. The divestment has proved a highly contentious one, sparking demonstrations outsides PGGM’s offices, while the Israeli government summoned the Dutch ambassador to protest the move. In the fallout following the decision to divest from the banks, it came to light that Gert van Dijk, chairman of the PGGM council, was also a member of pro-Palestinian organisation ICCO.Further, Cees Flinterman, who is a member of PFZW’s ethical board, is also a board member of The Rights Forum, as well as a member of the Support Committee of the Russell Tribunal on Palestine, organisations that have been accused of having an anti-Israel agenda.Since then, Borgdorff has confirmed in his blog that pro-Palestinian organisations Cordaid, ICCO, IKV PaxChristi, Oxfam Novib, Watershed Working Group and the Dutch Palestine Komite, among others, had been actively lobbying the pension fund for “several years”, and that it incidentally provided pension funds to “some of them”. IPE understands that PFZW was lobbied by pro-Palestinian NGOs only.Meanwhile, ABP, Europe’s largest pension fund, announced in early February that it would not be following PGGM’s example, and that it disagreed with the manager’s assessment that the banks had acted in breach of “international law”.In a statement, it concluded that the Israeli banks in which it invests had done nothing to violate the UN Global Compact, or give cause to initiate a formal engagement process.In an interview with IP Nederland, Borgdorff conceded that PFZW had underestimated the extent to which its divestment would be perceived as a boycott, and confirmed the scheme would now launch a “very extensive” review of its decision-making process.“This whole process warrants a deep and extensive review, and one of the issues that will be reviewed is how should we view all this in relation to our peers, including ABP,” he said.“Does this mean we should change our policy to better suit the policy of others? No, we have our own policy, and we need to take our own responsibility.“But perhaps it does mean we should devote more time beforehand to get to know the policy of others because, based on what I read in the newspapers and websites, I cannot explain the difference in policy between PFZW and ABP, and yet those policies lead to entirely different outcomes.”When pressed by IP Nederland on Flinterman’s advisory role, Borgdorff explained that PFZW had wanted “somebody significant, somebody who is significant internationally as well”, and pointed out that Flinterman was a rapporteur on the Middle East conflict for the United Nations.When asked whether the pension fund might have sought a more objective adviser for the role, he said: “I’m sure we could have found someone else, but then we also would have asked for a balanced opinion.”Borgdorff said PFZW had reviewed its entire decision-making process, including the role of the ethical committee, the investment committee and the board.“We have literally pored over the minutes,” he said. He added: “We recently had protestors on our doorstep, and, to get in the office, you had to pass through 250 demonstrators, and that does have an impact. Our own PGGM staff started to question what it is we’re doing. And I think that is a good thing. Let’s have that discussion.”PFZW’s director also conceded that he personally had been unprepared for the “commotion” the decision had caused.“I have spoken with a lot of representatives from Jewish organisations in the Netherlands, and what has deeply touched and unsettled me is that these people and their constituents are truly fearful, truly concerned and saddened,” he said.“They are afraid there will be an anti-Israel mood in The Netherlands reminiscent of the 1930s, and they are no longer sure they are still welcome here, as human beings.“And then you think – we made an investment decision. We were aware of the fact this would have an impact. But did we foresee this would so deeply impact the very hearts and lives of people? Well, that was a good deal more intense than we were prepared for.”Joel Voordewind, an MP for the CU party, said PFZW had “given into” the boycott, divestment and sanctions (BDS) movement against Israel.“By acting like this, the scheme goes further than the policies of both the Dutch government and the EU, which advocate discouragement of investment in Israel’s occupied territories, rather than an outright boycott,” he said.He said the pension fund had effectively taken a political stance on behalf of its participants.Esther Voet, director of pro-Israel organisation The Centre for Information and Documentation on Israel, decried Flinterman’s involvement in the decision in particular.“PFZW is applying double standards,” she added, “as it is still invested in Chinese banks that are active in Tibet.”Meanwhile, a Dutch Jewish action group called Tradition is Our Future has called for a “counter boycott” of PGGM, and asked Jewish organisations in the US to put pressure on Emory University in Atlanta to expel Else Bos, PGGM’s chief executive, from an advisory committee.The conclusions of PFZW’s review are expected some time in mid-March.Flinterman has declined to comment, citing confidentiality.
ABP, the Netherlands’ €325bn civil service pension fund, has said it will not divest from three Israeli banks due to their alleged involvement in the so-called occupied territories of the West Bank.In a statement, the board responded to an open letter from Desmond Tutu, the former Anglican archbishop for South Africa, who recently waded into the debate over whether the Dutch pension fund should remain invested in the banks.The board said it would stick with its existing policy for responsible investment and that, “based on objective and rational criteria, the investments are not in violation of national or international legislation”.Tutu, a Nobel Peace Prize winner, argued that ABP had in effect contributed to human rights violations through its €68m investment in Bank Hapoalim, Bank Leumi and Bank Mizrahi-Tefahot. The ABP board discussed Tutu’s letter today, together with a petition calling for divestment signed by more than 1.7m people.The petition was organised by Avaaz, an online civic organisation promoting activism.The former archbishop’s letter comes as a report commissioned by Avaaz claimed that roughly 50% of the Dutch public believes ABP’s commitment to the banks is “irresponsible”. Of the 1,000 respondents to the survey, 10% said ABP’s stakes in the banks were of no concern, while approximately 40% said they had no opinion on the matter.The survey asked: “If the directors keep ABP’s investments in Israeli banks that support the settlement of Palestinian land by Israeli settlers, would you view their decision as responsible or irresponsible?”Avaaz said survey results were roughly the same among ABP participants.The civil service scheme said it also received approximately 1,500 emails in support of the investments from members of the Christians for Israel organisation.Earlier today, ABP spokeswoman Jos van Dijk said: “We are dealing with very contradictory signals, which make decision-making very complicated.”Now, ABP has said it plans to maintain its investments in the banks, as it has found no evidence they are involved in human rights violations.According to the pension fund, the banks have merely facilitated money transfers within the so-called occupied territories.Earlier this year, the €152bn healthcare scheme PFZW made the controversial decision to divest from five Israeli banks, including those in which ABP is invested.
Real estate significantly improved its performance compared to 2013, returning 3.75%, up from 0.25% the year prior.Corporate bonds boosted the scheme’s asset value by 6.8%, aided by the book value increase due to low interest rates, while nearly all equity markets saw positive returns.Across all of Publica’s 21 pension funds, the average coverage ratio rose 1.2 percentage points to 105.3%, with none of the schemes underfunded. The fund was until recently shielded from the SNB’s negative deposit charges, a decision overturned after public backlash. The number of active members across all scheme members rose by 2.6% to 62,500, and pensioners fell by 3.3%.For more on Publica’s investment strategy, read IPE’s interview with deputy CIO Patrick Uelfeti Switzerland’s Publica has praised returns from its corporate bond and equity portfolios, while noting that its approach to hedging held back performance in 2014.The public pension fund, with assets of CHF37.7bn (€31.3bn) at the end of December, said as it published its annual report that overall returns would have been 8.9% last year rather than 5.9%, had it not fully hedged its currency exposure.It defended its hedging approach earlier this year after the Swiss National Bank (SNB) ended the franc’s peg to the euro, a move that would have led to significant losses had it not been for the hedge.Falling oil price also hit Publica, with the fund saying the nearly 29% decline in crude oil prices led to a loss of 1.1% in 2014. The loss was despite only 2% of the fund’s portfolio being invested in commodities – comprising crude oil, petrol and heating oil.
Concerns about the pitiful prospects for millions of people in the UK currently in workplace defined contribution pension schemes is well founded. It should lead trustees and others with responsibility for investment decisions to focus on working assets harder. This should not mean turning over portfolios evermore frequently – it should mean attentive stewardship of companies in pension portfolios based on analysis of the full range of risks that may inhibit returns over the short, medium and long term.The long term is, of course, what counts for most pension savers. To protect the interests of younger savers in particular, there’s a compelling case for fiduciaries to engage with the long-term economic implications of climate change. Lord Stern, the former World Bank chief economist who undertook a rigorous cost-benefit analysis of ignoring climate change, found that “the overall costs and risks of [inaction on] climate change will be equivalent to losing at least 5% of global GDP each year, now and forever”. He adds: “If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more. In contrast, the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to approximately 1% of global GDP each year.”Any prudent trustee with responsibility for the retirement savings of people under 45 years of age should be paying close attention to avoiding the potentially devastating impact of climate change on fund valuations in the decades to come. The low-carbon transition our economies must inevitably undergo will not be without some short-term pain, particularly for investors with heavy exposure to high-carbon sectors. Responsible fiduciaries have no choice but to grapple with these challenges. It is hugely encouraging Europe’s pension funds are now doing so.Catherine Howarth is chief executive at ShareAction Catherine Howarth, chief executive at ShareAction, says pension funds have no choice but to grapple with the issue of climate changeIPE deputy editor Daniel Ben-Ami is absolutely right to argue, as he does in his recent comment piece, Keep Politics Out of Pensions, that pension funds’ investment decisions should avoid political bias. The courts have ruled that trustees are barred from bringing their own political or ethical views, however strongly held or well intentioned, into decisions made as fiduciaries of other people’s money. There can be one, and only one, consideration for those who make investment calls with others’ retirement savings: the best interests of the saver.This requirement to secure savers’ best interests, which entails a strong though not exclusive focus on financial interests, is exactly why high-performing pension funds in the UK and across Europe have embraced responsible investment in recent years. The terminology of ‘environmental, social and governance’ (ESG) may be somewhat clumsy, but the wide variety of considerations that fall under that umbrella are demonstrably material to savers’ financial security and quality of life in retirement.Research undertaken by Arabesque Partners in association with Oxford University, published last year, assessed 200 of the highest-quality academic studies examining the economic evidence for sustainability. This showed that 90% of studies find that sound sustainability practices lower companies’ cost of capital, and 88% of studies show that strong ESG performance drives better operational performance by companies. Even when focusing on shareprice performance, 80% of studies find a positive correlation between good sustainability practices and strong share price performance.
“Previously, quite a lot of the disclosure requirements were driven by legislative rather than accounting requirements.“As the accounting requirements have developed, the legislative requirements have become more unnecessary and outdated, so it now makes sense to align the two.”Kevin Clark, an associate partner at KPMG in the UK, added that the way was now clear for pension schemes to take a more focused approach to pension scheme investment disclosures.“It is the start of an exciting new era,” he said. “It draws a line under rule changes and sees us move into an era of more relevant and meaningful reporting for pensions schemes.”Clark chairs the Pensions Research Accountants Group working party, which identified the need to remove the now outdated disclosure regulations.He added: “It enables us to take full advantage of the principles-based disclosure regime in FRS 102 and the SORP guidance.“This encourages trustees and scheme accountants to make the most meaningful disclosures possible in scheme accounts based on investment strategy.”The removal of the disclosures follows a recent consultation by the DWP.That process was prompted by the decision of the UK’s audit regulator, the Financial Reporting Council (FRC), to embark on a major project to consolidate UK GAAP into a single accounting standard, FRS 102.This move forced the FRC to update the Statement of Recommended Practice (SORP) that governs pension fund disclosures.Although FRS 102, a modified version of the International Financial Reporting Standard for Small and Medium-sized Entities, deals with pensions accounting, the SORP provides a layer of recommended practice on top of that.Since the last update to the SORP in 2007, the UK pensions landscape has seen the introduction of auto-enrolment and a growing number of pension schemes entering the Pension Protection Fund.The FRC’s actions left the DWP’s investment disclosures largely redundant.“We very much welcome the change in legislation,” Clark said, “because it clears the decks for the new disclosures that come in under FRS 102 and the revised SORP.“We don’t have the double whammy of having to deal with the new disclosures and the historic disclosures, which were widely recognised as being no longer fit for purpose.“Most schemes are moving into their end of March reporting, and this change means any accounts signed after this date, even if they reference the 31 December year-end, can take advantage of the removal of the disclosures.”Meanwhile, the FRC has announced it wants to receive comments on FRS 102 ahead of reviewing the standard in 2018.In a statement, FRC director Melanie McLaren said: “[W]e are providing an opportunity, now, for those interested in financial reporting to give feedback as they are preparing their first financial statements complying with the new standards.“Providing feedback this year will be an important first stage in shaping the future development of the standards.” The UK Department for Work and Pensions (DWP) has published new regulations that remove the need for UK pension funds to make what many experts see as largely redundant investment disclosures.The new disclosure regime takes effect from 1 April and affects disclosures by pension funds rather than corporate scheme sponsors.Advisers who spoke to IPE welcomed the move, not least because it aligns the statutory disclosure regime with UK GAAP.Philip Briggs, a partner in RSM’s pensions group, said: “This is a positive move to reduce the red tape surrounding disclosure requirements for pension schemes.
Strengthening financial markets throughout March enabled Spanish occupational pension funds to achieve positive returns for the month, according to figures from Mercer’s Pension Investment Performance Service (PIPS).The average return for the month was 1.1%, the biggest – 2.4% – coming from non-EU equity portfolios.EU equity portfolios returned 2.1%, fixed income 0.3%.However, this did not compensate for the turbulence in the second half of 2015 and the first two months of this year. Across all asset classes, returns for the first quarter of 2016 were -0.4%, with EU equities returning -7.6% and non-EU equities -3.5%.Fixed income portfolios, however, made gains of 1.5%.The PIPS survey covers a large sample of Spanish pension funds, most of them occupational schemes.Over the 12 months to end-March 2016, fixed income returned exactly 0.0%, while EU equities returned -15.4% and non-EU equities -9.3%.Xavier Bellavista, principal at Mercer, said: “The quarter has seen volatile performances, especially in equity markets. EU equity assets had the worst negative performance, but non-EU equity assets also posted negative returns, especially because of the performance of non-EU currencies.”He added: “Fixed income assets are also increasing in volatility and have incurred a negative performance for some months.“EU fixed income assets made positive returns for the quarter to end-March, but lower returns are now expected because fixed income indices posted a negative performance during April.”Bellavista said non-EU fixed income assets had been affected by the negative performance of some emerging fixed income assets, and also by the depreciation in non-EU currencies.Meanwhile, according to Spain’s Investment and Pension Fund Association (INVERCO), occupational pension funds returned -3.33% for the 12 months to 31 March 2016. Average annualised returns for Spanish occupational funds were 4.66% for the three years to 31 March 2016, and 4.67% for the five years to that date.As at the end of March 2016, total assets under management for the occupational pensions sector stood at €35bn, a decrease of 3.4% over the past year.Total pension assets, including those in individual plans, now amount to €103.1bn, while the number of participants in the occupational system remains stable, at just over 2m.According to INVERCO, the gradual shift away from domestic assets continues, with an average 60.6% of portfolios now invested domestically, compared with 61.4% at end-December 2015.Non-domestic assets made up 22% of portfolios as at the same date, with the balance in cash and technical provisions.Fixed income investments make up 57.3% of portfolios, barely unchanged over three months.The biggest single component of pension fund portfolios – 32.3% – is still invested in Spanish government bonds, with a further 16.3% in Spanish corporate bonds.Bellavista highlighted what he considered to be the most significant change in asset allocation in corporate pension funds in the past 15 years – the increased allocation to non-EU fixed income assets.“Historically, this allocation was close to zero,” he said. “But, in the past three to four years, it has increased to around 6% of corporate pension fund portfolios.”Over the past couple of years, he added, Spanish pension fund managers have been increasing the duration of fixed income portfolios in response to the extremely low interest-rate environment.The average duration of corporate pension funds rose from 3.5 years at end-2013 to 4.5 years at end-2015.Meanwhile, an average 21.2% of portfolios is invested in equities, down by 1.4 percentage points since end-December, according to INVERCO.The category of ‘other investments’ – real estate and alternatives, almost all invested domestically – has increased from 3.6% at end-December 2015 to 4%, more than double the percentage in December 2011.
The energy investment initiative is unusual, as it comes from the commercial world rather than EU institutions such as the European Commission’s DG Energy. This department is headed by Maroš Šefčovič, European commissioner for the Energy Union. On the commercial side of the fence, the Alphandéry group includes support from formidable financial powers. The banks with representatives involved in the study include Deutsche Bank, Goldman Sachs, HSBC, PNB Paribas and Société Géneral.No less force comes from industry. The group’s energy companies include ERDF, which manages the public electricity-distribution network for 95% of France; IBERDROLA of Spain; SNAM, the Italian specialist in natural gas infrastructure; and Belgium’s ENGIE, which operates globally in the fields of electricity, natural gas and other energy services.When referring to the EU Energy Union, the group’s study indicates friendly liaison with the Commission’s DG Energy. It also makes positive references to the EU’s Capital Markets Union, the €315bn Juncker investment plan and the European Investment Bank. As the members of the group would no doubt be aware, the Junker plan – the EU’s European Fund for Strategic Investments – already lists as an objective the task to remove regulatory bottle-necks, including for the Energy Union. Hence, a reasonable interpretation of the motive behind the group study is simply to catalyse a step-up in urgency in the interests of investment in energy infrastructure. While the group itself would not stray from diplomatic terminology, a vulgar reading of its report is simply that it intends to give a kick in the pants to Brussels, to encourage a speed-up. Invited to comment on the plan, Šefčovič’s department preferred to hold its tongue.Other pressure in parallel direction of EU cross-border energy liaison can be understood from an ‘opinion’ published by the European Economic and Social Committee (EESC). Its paper was issued almost simultaneously to the unveiling of the Alphandéry group study. The EESC calls for a “speaking-with-one-voice” approach to the EU’s energy policy and the establishment of a “safe balance of importing streams”.Back to the bank-industry document, it lists a series of recommendations of what should be done. For example, it favours the setting up of a list of projects that meet various criteria, such as that they fit in with a pan-European energy policy. Another recommendation would boost activity by the existing Agency for the Cooperation of Energy Regulators (ACER) in its role of increasing the convergence of national regulators. ACER was set up in 2010 in Ljubljana, Slovenia, partly with this objective in mind.Additionally, the group would like to see enhanced activity of an Ombudsman-type process of project coordination. This would create accountability for the delivery of projects locally and take steps to enhance the credit rating of senior debt, thus to facilitate access from institutional sources. The group politely goes on to praise the Commission’s “projects of common interest” concept, but it then comments that, whilst in 2013, 248 “PCIs” were listed, only 13 of them had so far been completed. For more on global energy markets, see the Special Report in the May issue of IPE magazine Jeremy Woolfe relates some the recent efforts to unlock investment in Europe’s energy infrastructureA plan to unleash large investment opportunities, including for pension fund asset managers, into EU cross-border energy projects has been unveiled by a group that encompasses globally known banks working together with international energy companies. According to a figure the group attributes to the European Commission, the estimate of the funding requirement to develop electricity, gas and other energy-related schemes across EU frontiers, up to the year 2020, is a colossal €1trn. However, at present, there are “many factors” that explain the difficulty to launch such projects, the group states in a study unveiled recently in Brussels.Impediments faced by investors include that each individual project may need to sort out its own economic profile, and this has to be done working with different sets of national legislation. The study by the group sums up the challenge as overcoming a “low level of energy-policy integration and the disparities between the regulations and policies among [EU] member states”. Among other tasks is coping with a “mismatch between the long-term perspective of investors and the short-term economic and political cycles”. Furthermore, writes the group, account has to be taken of “the rapid pace of technological change” (renewables, storage, energy efficiency and so on).The group is chaired by Edmond Alphandéry, a former economics minister in France. Since July 2013, he has been chairman of the board of directors of the Brussels think tank the Centre for European Studies. At the study’s launch, Alphandéry summed up the aims of the group as “to reduce bottlenecks for investors”. Otherwise, the present predicament of projects taking 15 years to get from conceptualisation to realisation would continue, he said.
John Bilton, global head of multi-strategy at JPMAM, says his company has decided to “meaningfully de-risk our multi-asset portfolios – most visibly by reducing stock-bond [balance] to a small underweight for the first time in nine years”. Luca Paolini, chief strategist, Pictet AMThe consensus on credit is downbeat overall, but with pockets of value to be found with careful searching. SSGA’s O’Leary is rather more bullish than most, arguing that fundamentals remain constructive. He adds that the next downturn in the credit cycle does not represent an immediate threat.BlackRock Investment Institute’s (BII) 2019 outlook report also argues that fundamentals are positive, with ample interest coverage. However, the report also points out signs of a late cycle in credit.“Financing costs are on the rise, costs are up and companies at the low end of the investment grade spectrum (BBB-rated) have been issuing more bonds to fund share buybacks and acquisitions,” BII states. “Overall we see limited upside and asymmetric downside as the economy enters into a late cycle phase.”Pictet’s Luca Paolini, chief strategist, is again much more cautious: “Clouds are gathering over the corporate credit market. Valuations are firmly against it, with credit ranked as the most expensive asset class in our valuation model.”He adds a further warning: “Corporate leverage is edging up, bond issuance has been very high, the share of traditionally more short-termist retail investors is growing, and liquidity is low.”Columbia Threadneedle’s deputy CIO Mark Burgess sums up another big fear for fixed income managers: “We continue to be concerned about the levels of debt in the world, particularly sovereign and corporate debt, with net debt to GDP in the likes of China looking increasingly unsustainable.” John Bilton, global head of multi-strategy, JPMAMHe cites a downward shift in the global economy, slowing of earnings growth expected in 2019, and tightening of monetary policy.For fixed income managers, top of mind for 2019 is the US Federal Reserve. Nick Maroutsos, co-head of global bonds at Janus Henderson Investors, says the Fed’s interest rate decisions are the “most important” factor for fixed income this year.“Much of what will occur in bond markets – and the economy – will be influenced by the Fed’s actions,” he says. “While some expect an even more aggressive Fed we believe that, given its history of caution, it will err on the ‘dovish’ side.“The threat of an escalating trade war and broader prospect of slowing global growth are two factors that could necessitate a pause on rising interest rates.”The majority of managers state that fixed income prospects are mediocre at best. At the end of 2018 the European Central Bank followed the Fed’s 2017 action and ended QE, although it will maintain the size of its balance sheet for now. Despite this, asset managers expect a gradual withdrawal of global liquidity will bring fundamental changes to yields and asset valuations.Unigestion’s managers are bearish on all fixed income, stating: “Quantitative easing has been the perfect environment to increase risk and leverage, but as 2018 has started to show, the picture is now changing.”State Street Global Advisors’ (SSGA) Niall O’Leary, global head of fixed income, highlights the extreme spread between the US and German 10-year yields, which towards the end of 2018 was at its widest level since the euro was introduced. He suggests that, although perhaps currently justified, this spread is unlikely to persist indefinitely.InflationAnother pressure point for long-term bond yields is inflation expectations.Fidelity International’s James Bateman, CIO of multi-asset, warns that the market is complacent about rising prices, with too many people believing central bank independence has tamed inflation for good.“While our base case is for a moderate increase, the biggest problems often go unnoticed until it’s too late,” Bateman says. “Higher-than-expected inflation is one of those potential problems.”Credit Global growth will be slower in 2019, volatility will remain on a par with 2018 but the risk of recession is low – according to some of Europe’s leading asset managers.IPE has analysed investment outlooks from a number of major firms, including JP Morgan Asset Management (JPMAM), Janus Henderson, Fidelity, and Pictet.The first part – summarising the outlook for equity markets around the world – is available here.The year ahead will bring challenges for managers of government bonds, credit and other fixed income asset classes, but it’s not all about quantitative easing (QE).
A planned new publicly-run occupational pension fund for Italy is flawed and the country’s Social Security Institute (INPS) would be unsuitable to run it, according to industry experts.Claudio Pinna of consultancy group Aon and Antonio Iaquinta of State Street Global Advisors (SSGA) both told IPE that they doubted the INPS would be capable of managing the fund proposed earlier this month by the agency’s president, Pasquale Tridico.Pinna, head of retirement consulting business in Italy for Aon, said: “INPS is the institute which is dedicated to managing social security and my feeling is that this should be their main focus.“Social security in Italy is managed on a pay-as-you-go basis, and they are not experts at managing assets in that kind of way.” “We need to focus and develop the private pension system, but not in this way”Claudio Pinna, Aon“They should be focused on social security, including the funded part of social security, to allow the institute to guarantee a high quality of service to the employees around the country in Italy – and certainly the quality can be increased,” he said.Iaquinta, head of institutional clients in Italy at SSGA, said the proposal – one of a series of ideas for the Italian labour market conditions presented earlier this month – was not a good idea.“INPS has always had a specific mission. What is being discussed now is a different task and you need skilled people to do it, so it is difficult to think that INPS has the in-house expertise to run a complementary scheme,” he said.Iaquinta also said that, if the goal of the new scheme was to increase the number of Italian workers in the second pillar, there was still a lot of room to boost numbers within existing DC schemes.“We are at around a 30% participation rate,” he said. “The lack of offering is not the main reason behind the current low participation rate. It is mainly the lack of knowledge, financial education and, unfortunately, the lack of a consistent and productive public campaign on the importance of creating a second pillar scheme for yourselves.”Iaquinta also voiced concern about Tridico’s proposal for the planned new fund to invest more in Italy. “It can be a good idea to invest more in Italy and within Italy, but it is not a good thing to concentrate all the investments in one country,” he said. “Diversification is a key element.”Developing the systemAon’s Pinna conceded that the chairman of INPS had raised some key issues in his broader speech on 10 July.“The development of the private pension system in Italy is crucial, and I agree that these are important points that the government should assess,” he said.The 30% participation rate, combined with workplace pension assets amounting to less than 10% of GDP, demonstrated that the private sector pension system required change, Pinna said.“It is still not in line with the needs of the employees,” he added. “Tridico is correct; we need to focus and develop the private pension system, but not in this way.”Pinna also challenged Tridico’s assertion that there was a lack of transparency in the private pension system.“Although this was probably was true in the past for some pension funds, with the new IORP II directive, pension funds are applying these rules so there is a lot of transparency here,” said Pinna. He added that INPS was already managing two big reforms taking place in the next three years, involving a national minimum level of income and early retirement for some workers. Antonio Iaquinta, SSGASSGA’s Iaquinta supported the government’s and INPS’ belief in the importance of retirement savings, but called for a focus on existing schemes rather than new solutions.“Instead of thinking about creating something new, let’s focus first on what it is already available,” he said. “Let’s focus the effort on the current second-pillar schemes and work with them on increasing the participation rates. Let’s increase the resources there, which can then be invested more and more within Italy, encouraging a virtuous circle.”IPE has contacted INPS requesting more details of the proposal, but as yet has received no response.The plan outlined by Tridico has already been rejected by the undersecretary of state in the Ministry of Labour and Social Policies, Claudio Durigon, and has met with opposition from Italian trade unions.
Sneak peek into travel king’s controversial mansion Four couples set their eye on 5 School Rd, Hendra.After almost eight weeks of being forced to live, and even work, in close proximity, four Brisbane couples last week decided enough was enough.Fed up with being confined to their inner-city apartments they decided it was time to buy a house and turned their attention to a little Californian bungalow in Hendra. The house attracted the attention of four seperate couples.For each of them the property at 5 School Road in Brisbane’s leafy northside suburb was the perfect entry level home. For some of them it offered affordability, coupled with enough space to save their relationship. None of the couples had seen the property prior to COVID and some had not even consideredentering the property market before putting an offer in on the home. Amy Jamieson and her partner Ryan bought 5 School Rd, Hendra, during COVID-19 to give each other some more space, after renting for yearsAfter a fierce battle it was Amy Jamieson and her partner Ryan, that secured the house for $855,000 through Ray White New Farm.The couple had been renting a two-bedroom apartment in Bowen Hills and had been looking for a place for about 18 months.“We had never considered Hendra before,” Ms Jamieson said. “We were quite lucky because we ended up buying in an area in which we didn’t think we could afford to live,” she said. The house offers the couple, who have been renting an apartment, more space.While the couple have been working during the pandemic, Ms Jamieson said she could see how the restrictions would be putting a strain on relationships.“When we had to work from home, being in an apartment Ryan would be in the kitchen and I was 2m away in the lounge and I felt I had to be quiet and not make a noise because he had to make phone calls. It can really test people’s patience levels.”With their house having four bedrooms on a decent-sized block, the couple will have the opportunity to carve out their own space.More from newsParks and wildlife the new lust-haves post coronavirus9 hours agoNoosa’s best beachfront penthouse is about to hit the market9 hours agoMs Jamieson said, for Ryan, that would probably be the rustic tin shed out the back. The tin shed was one of the biggest attractions of the property for the couple.“The shed was one of the things that first attracted us to the property. Ryan has a car and a motorbike and stuff, so it was definitely a selling point. We had looked at other houses but none of them had a shed, so I think it was what convinced us to inspect the property in the first place.” The property is modest but much more spacious than an apartment.Selling agent Christine Rudolph said this was the perfect time for sellers to list their propeties because there were plenty of eager buyers in the market.“It’s a great time coming out of COVID for sellers to jump in and capitalise on theshortage of quality supply and the optimism we are seeing from buyers,” Ms Rudolph said. MORE: Huge interest in termite-infested house How some men have survived lockdown Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 1:40Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -1:40 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels540p540p360p360p270p270pAutoA, 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 Rate1xFullscreenCOVID-19: How the property market is tracking01:40