New pensions law goes into effect in Russia

first_imgRussia’s new pensions law came into effect on 1 January following its approval by the State Duma, Federation Council and president Vladimir Putin’s signing off in late December.All non-state pension funds (NSPFs) will have to convert from their current status as non-profit organisations to joint-stock companies – by the start of 2016 for those offering mandatory pensions and by 2019 for voluntary funds – and be licensed by the Bank of Russia, the central bank and the pensions regulator.Funds that fail to convert by the relevant deadline will be liquidated.Mandatory funds will require a minimum RUB150m (€3.3m) in own funds and share capital of RUB120m, rising to RUB200m and RUB150m, respectively, as of the start of 2020. The new companies will only be able to issue ordinary shares.They will be prohibited from issuing loans and, for the first five years of their existence, any dividends.The law bans offshore companies from holding shareholdings in the companies, a proscription that may in future be extended to foreign entities.No single entity or individual can hold more than 10% without prior approval from the Bank of Russia.The executive head of the new company would be expected to have a minimum two years’ relevant financial experience.As in the case of the previous system, the second pillar remains restricted to those born after 1967.Workers can chose whether to pay the 6% contribution to a privately managed fund or have the full 22% contribution in the first pillar – also the default option – with the deadline for this choice set for the end of 2015.Pension contributions for 2014 will in the meantime flow into the first pillar.The new law introduces a two-tier guarantee system.The first is a reserve fund that each company must build up from investment income and other assets, including the shareholders’ own funds.By 2018, a pension company’s reserve fund would have to be a minimum 1%, and a maximum 10%, of its pensions savings.The second level is a guarantee fund compensating members in the event of a pension company bankruptcy, to which the new companies must subscribe.This entity will be run by the Deposit Insurance Agency, the state body responsible for bank deposit insurance.The new pensions legislation also changes, as of the start of 2015, the coefficients for calculating first-pillar pensions payable on retirement, including making it more financially attractive for workers to defer their retirement.Crucially, it did not change the statutory retirement age, of 55 years for women and 60 years for men, which remains low by international standards.For more on pensions in Central and Eastern Europe, see the current issue of IPE magazine.last_img read more

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Pension fund for Dutch notaries to revamp entire investment portfolio

first_imgSNPF, the €1.2bn occupational pension fund for notaries in the Netherlands, is to rearrange its entire investment portfolio with the view to improving control of the interest risk on its liabilities, as well as to save costs. The scheme recently changed the management style of its matching portfolio from active to passive, with its investments following the liabilities curve as closely as possible, according to Eric Uijen, the scheme’s director. Uijen told IPE the €550m ‘liabilities portfolio’ chiefly consisted of high-grade government bonds from Germany, the Netherlands, France, Finland and Austria.With added interest swaps, the portfolio covers approximately 80% of the scheme’s interest risk, he said. The SNPF also converted four fixed income mandates into one, managed by Syntrus Achmea Asset Management.The pension fund said only limited mandates for credit remained with Aegon and Pimco, and that it no longer employed the services of Lombard Odier.According to Uijen, the changes stand to save the pension fund €700,000 a year in asset management costs, while the “considerably lower” number of deals will cut costs even further.He estimated that asset management costs, without transaction costs, would drop from 0.42% in 2012 to approximately 0.20% in 2014. Uijen said the scheme’s return portfolio would be screened for possible efficiency improvements for cost cutting – by converting to passive management, for example. “At the moment, we need to answer the question of whether and to what extent we want to allow asset managers to deviate from the assigned benchmark,” he said. The SNPF’s return portfolio consists chiefly of investment-grade credit and global equity.Uijen said the pension fund intended to divest its 5% private equity holdings gradually, as the SNPF considers itself too small to have such illiquid assets in its portfolio.He added that the asset class was also “difficult to comprehend”. However, he said the SNPF was in “no hurry”, as its current investments were in the “right position on the J curve”.With the view to cutting costs further, the scheme transferred its pensions administration – managed in-house to date – to provider TKP Pension last January.The pension fund had to apply rights cuts in 2011 and 2013 of almost 2% and 5.8%, respectively, in order to adhere to its recovery plan.At year-end, its coverage ratio stood at 106.5%, 2.1 percentage points above the legally required minimum.last_img read more

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Reformed Irish SWF to act as alternative source of project finance

first_img“I am conscious there is little precedent for sovereign funds globally investing with such a mandate,” he told attendees, “although a number of such funds are beginning to emerge. I believe we are setting up a model that will come to be widely copied.”Eugene O’Callagham, head of investments at the NPRF, last month told IPE the dual objective would be a “big challenge”.“The concept of impact investing is emerging, but, for sovereign funds to have both return objectives and to support economic activity is quite a new development,” he said.Noonan told the conference, aimed at attracting further co-investors to ISIF projects, that the fund would recycle assets for the benefit of future generations.He also highlighted the need for the ISIF – which, last year, through the NPRF, committed to a suite of funds offering credit and financing to small and medium-sized enterprises (SMEs) in Ireland – to offer financing to a wide range of industries.“Developing alternative sources of financing for infrastructure projects and business across all sectors of the economy – from agriculture, to construction, to technology – is essential and will complement existing funding source,” he said.“I would encourage business and their representative bodies here today to examine alternative funding models in place in other jurisdictions and to come forward with plans for investment for the ISIF.”He also noted that the NPRF had so far “taken an open-minded and flexible approach” to any commitments.In a statement released ahead of the conference, O’Callaghan said: “The ISIF is open for business and actively looking for investment opportunities that will meet its ‘double bottom line’ criteria of generating commercial returns as well as delivering economic benefits.”Noonan also highlighted that the government would publish a new infrastructure investment framework in 2015 that would increase the likelihood of public-private partnerships (PPPs) being used as a method for funding infrastructure projects.“It will be open to the ISIF to invest in PPPs where there is a commercial return,” he said. The Irish government has said it is “essential” the Ireland Strategic Investment Fund (ISIF) act as an alternative source of financing for a broad range of projects – from agriculture, to construction and technology ventures.Minister for finance Michael Noonan said he was hopeful Parliament would pass a yet-unpublished bill by “the middle of the year” to formally establish the ISIF, allowing the €6.8bn held within the National Pensions Reserve Fund’s (NPRF) discretionary portfolio to be deployed.Despite publishing an amendment to existing legislation last summer, the coalition government has yet to pass a full act on the ISIF, meaning the NPRF has so far only been able to commit or invest €1.1bn in domestic projects aimed at boosting Ireland’s recovering economy.Speaking at a launch event in Dublin Castle yesterday, Noonan confirmed the ISIF would have the dual investment objective of achieving investment return and economic impact.last_img read more

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IPE Views: Parliament debates risks of IORP inaction

first_imgJeremy Woolfe observes the the Economic and Monetary Affairs Committee’s public hearing from the sidelines and finds old arguments being rehashed and warning shots exchangedThe usual warning shots were exchanged as the European Parliament discussed changes to the EU’s occupational pensions legislation, with some speakers warning that parliamentarians should take care when implementing change.Brian Hayes, MEP and rapporteur for the IORP directive within the Economic and Monetary Affairs Committee (ECON), fired back. Wrapping up the public hearing on the IORP II proposals, Hayes warned: “When you are dealing with other people’s money, you have to be very careful.“Where we have people who sacrifice a part of the monthly, or weekly, income, to be part of deferred income, we cannot afford to take risks.” On the matter of full funding, Hayes told the hearing at the ECON gathering that the matter should be seriously examined. “We should look for a ‘gold-standard’ across the board.” Hitting yet another sore spot, that of cross-border arrangements, the centre-right MEP, who moved to Brussels in May 2014, noted that there was a need for a “fit for purpose” system as more and more people began moving across boarders.Are the statements a good indicator of what Hayes will publish in his report on IORPs II, due before this summer’s break? Not if some of the bystanders have their way.The IORP II proposal’s advance has been sluggish, going back to 2010, at least, when the Commission published its green paper on pensions. But two years earlier it had also considered reviewing some funding rules.The current recasting of the existing IORP Directive from 2003 was published in March 2014. Then, the Commission’s revisions were focused on minimum standards on fund governance, minimum information rights for beneficiaries, and standards for prudential supervision by national authorities.At the ECON hearing, Joanne Segars, chair of PensionsEurope, the voice of the sector, noted that, during recent Council of the EU discussions, certain points of “flexibility” had been agreed by member states. She asked the European Parliament to continue along the same line.Another speaker, Klaus Stiefermann of aba, the German association for work-place-based pension provision, summed up opposition need for change. “I think we need only minimum standards,” Stiefermann said. “As long as we don’t have a pan-EU unified first pillar pension scheme, we don’t need unified systems for pillars 2 and 3.” Conversely, another German, Green Party MEP, Sven Giegold, stressed that attention was needed to deal with underfunding, especially in the face of low interest rate returns.last_img read more

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Dutch government to review problem of pension-fund relocations

first_imgThe Dutch government has said it plans to look again at the contributing factors behind the problem of local pensions fund relocating to other countries, and that it could make “legal adjustments” if deemed necessary. State secretary for Social Affairs Jetta Klijnsma, fielding lawmakers’ questions on the revised IORP Directive, said instances of pension funds moving abroad were “undesirable”, particularly if driven by regulatory arbitrage or higher discount rates for liabilities. She said the country’s new general pension fund, the APF, could provide Dutch schemes with an alternative to establishing cross-border pension plans.She also sought to put the scale of the problem into perspective by pointing out that Belgian institutions were now managing no more than seven schemes on behalf of Dutch companies, and that the combined assets thereof amounted to just €550m, or 0.1% of overall pension assets in the Netherlands. Klijnsma pointed out that the revised IORP Directive had provided the Dutch regulator with explicit criteria for blocking cross-border transfers – if individual pension rights were violated, for example, or in the event of underfunding relative to the new financial assessment framework (nFTK).She also took pains to emphasise that both the company and pension-fund participants, as well as the regulators in both countries, had to approve a relocation.She said the revised IORP Directive did not demand further harmonising of capital requirements for pension funds, or contain a delegated competence for the European Commission or EIOPA.The state secretary said the EU had not been granted the ability to “cream off” pension assets, and that it would be up to EU member states to design their European Pension Benefit Statement (PBS).The European Parliament still has to vote on the revised directive, scheduled to come into force at year-end.After that, member states will have two years to incorporate the rules into their local laws.The IORP Directive is to be evaluated after six years, Klijnsma said.last_img read more

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Dutch political parties stay positive on new pensions agreement

first_imgSteven van Weyenberg, MP for coalition partner liberal democrats (D66), described the result as “a more individual system, balanced for all generations, with less promises but with better perspectives for a proper pension”.He noted that 90% of pension premiums in the new contract will be added to pension assets reserved for the individual participant.However, Pieter Omtzigt, MP for the Christian democrats (CDA) – also a coalition partner – refrained from commenting on the outcome for now.Omtzigt is usually keen on knowing the details of arrangements, which are expected to be published on Friday.Gijs van Dijk, MP for labour party PvdA, also responded positively. However, he hailed the “protection of workers, the options of early retirement, the slowdown of the rise of the retirement age for the state pension (AOW) and the prevention of unnecessary rights cuts” as the main achievements of the accord.“A more individual system, balanced for all generations, with less promises but with better perspectives for a proper pension”Steven van Weyenberg, MP for coalition partner liberal democrats (D66)However, Bart van Kent, MP for socialist party SP, argued that the cabinet and the social partners had squandered “the best pensions system in the world” and that they had opted for a “gamble pension”, with an increased susceptibility to the daily volatility of the financial markets.He wondered who was going to pay for the transition, adding that merging existing pension rights with future accrual violates “earlier agreements and claims”.50Plus, the party for the elderly, contented that the accord will make the “unnecessary drop of purchasing power for millions of pensioners permanent”.It argued that the abolishment of the discount rate for liabilities shows that looming rights cuts would never have been necessary.It is expected that the Dutch cabinet will discuss the conclusions of the negotiations between Social Affairs’ minister Wouter Koolmees and the social partners next Thursday.To read the digital edition of IPE’s latest magazine click here. Dutch political parties have responded predominantly positively to the recent breakthrough between the country’s cabinet and its social partners in fleshing out last year’s pensions agreement.However, some opposition parties condemned the proposals, with a socialist party (SP) member of parliament (MP) describing the new arrangements as a “gamble pension”.Roald van der Linde, pensions spokesman for the liberal party and government coalition partner VVD, said the elaboration of the pensions accord was “excellent news”.“It makes pensions comprehensible, as you know what has been invested for you,” he said. “Moreover, we will get rid of the discussions about the discount rate for liabilities.”last_img read more

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Apartments bigger than the average size of land in demand

first_img TOONDAH OUTLOOK The complex will offer an incorporated business centre, function room, reception and entry areas, three street frontages, a mens’ shed, craft room, pool, gym and sauna, expansive grounds and recreation areas as well as multiple car accommodation and storage options for residents, including room for RVs, additional cars boats and vans. Apartments bigger than the average block One of Redland city’s most talked about residential projects, Toondah Outlook, has seen hundreds through the display unit’s doors since they opened recently.Hundreds of prospective buyers have inspected the new display apartments at AFT Projects’ latest development in Clevelend Toondah Outlook since they opened in November. He said Toondah Outlook was a landmark project for Australia’s east coast.“This level of luxury and inclusion has not been available on the doorstep of Moreton Bay ever before and that is attracting wide interest in and of itself given the views on offer,” he said. RELATED: >>FOLLOW EMILY BLACK ON FACEBOOK<< THE BASICS Redlands property analyst and developer Chris Anderson said the $100 million luxury apartment project was almost 70 per cent old and building was on track to welcome the first residents from May 2019. The nine-storey complex will offer Moreton Bay, island and mountain views.More from newsParks and wildlife the new lust-haves post coronavirus15 hours agoNoosa’s best beachfront penthouse is about to hit the market15 hours ago“Buyers are expecting more and now want location that offers lifestyle and convenience with necessary infrastructure on tap.“Toondah Outlook has, from its inception, been about the residents and what they want.“That has captured would be downsizers and the 21st-century families alike.”The nine level, resort-style project in Cleveland has become a benchmark for the apartment sector in the region offering a Moreton Bay, island and mountains views. Own your own motocross track The $100 million luxury apartment project is almost 70 per cent old.Mr Anderson said the new display units were styled by leading Australian and New Zealand decorators, including Stuart Bateman.“Stuart just has the eye and the knowledge,” he said.“His input sees us set include textured finishes and he’s detailed on the finer points of cabinetry design while casting his eye to functional layout and ambience.” MORE: Developer: AFT Projects Price: From $625,000 to $4.5 million (TBC on completion) for a six-bedroom penthouse Location: Cnr of Wharf St and Shore Street East, Cleveland. Phone Chris Anderson on 0412 159 202, or Sharon Saul on 0403 384 904 to arrange an inspection. Historic weather observatory hits the market Building is on track to welcome the first residents from May 2019.“And we’ve thrown out the standard unit sizing approach,” Mr Anderson said.“We’re creating room with two to five-bedroom apartments in a complex that offers more usable space and outside area that many homes.” Features include high ceilings, Smeg appliances, airconditioning, secure entry and parking, pool, sauna, gym, workshop, covered barbecue pavilions and bulk storage facilities.last_img read more

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Urban hub a drawcard for buyers wanting to live close to city

first_imgMoreton Bay is coming of age as master-planned communities like Capestone cater to a surge in demand for affordable housing with city proximity.Moreton Bay is coming of age as master-planned communities such as Capestone cater to a surge in demand for affordable housing with city proximity.Located 40 minutes from Brisbane’s CBD, Capestone is a 2000-lot, five-stage land release at Mango Hill by developers Urbex.The project was first launched in 2012, and 1600 lots have now been sold as the development nears completion.Urbex Realty general manager Craig Covacich said the 220ha site off Anzac Rd offered land ranging in size from terrace home lots of 220sq m through to larger home sites of 600sq m.More from newsParks and wildlife the new lust-haves post coronavirus11 hours agoNoosa’s best beachfront penthouse is about to hit the market11 hours agoThe development also includes an urban hub with train station, childcare centre, 12.8ha lake, shops, open space and parklands. The station opened in 2016, the lake has recently been completed, and the shopping centre will begin construction later this year.With lots from $310,000 and lakeside land selling for around $485,000, Mr Covacich said the development was catering to a demand for affordable land, and was attracting first home buyers, up-sizers and downsizers alike.He said developments like Capestone were accommodating an influx of residents into the Moreton Bay area, who were seeking an affordable alternative to Brisbane.“Moreton Bay is coming of age, predominantly driven by its affordability,” he said. “The area attracts approximately 30 per cent of all the Brisbane region’s growth, with demand for 4000 new homes each year, yet it has only 5 per cent of the region’s land supply.“Buyers can be into a home with all the amenities for a couple of hundred thousand less than other shires in the southeast.”last_img read more

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Canada sets up C$1.3 billion Strategic Innovation Fund

first_imgIllustration (Photo: NS Department of Energy) The government of Canada has launched a Strategic Innovation Fund to attract and support large-scale business investments across all sectors of the economy.The goal of the fund is to encourage collaboration between the public and private sectors, accelerate R&D and bring innovations to market faster.The fund has a budget of C$1.26 billion ($972 million) over five years for the allocation of repayable and non-repayable contributions to firms of all sizes across all of Canada’s industrial and technology sectors.It will support four types of innovation activities including research, development and commercialization of new products and services, and growth and scale-up of high-potential firms.Also, the fund will back public-private collaborations in developing and demonstrating new technologies, and support the attraction of new investments to Canada, expected to expand business opportunities and create jobs for Canadians.Navdeep Bains, Canada’s Minister of Innovation, Science and Economic Development, said: “Our government recognizes that innovation happens in every sector of Canada’s economy. The Strategic Innovation Fund is designed to reflect the diversity of innovative sectors that exist in Canada and to encourage cross-sector partnerships. This fund is an investment in jobs and skills training for Canadians. Putting Canada at the forefront of innovation will equip Canadians with the in-demand skills they need for well-paying middle-class jobs now and into the future.”The fund has a common set of terms and conditions that apply to all sectors, and is part of fund is part of Canada’s Innovation and Skills Plan, a multi-year strategy to create well-paying jobs for the middle class and those working hard to join it.last_img read more

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Reisinger Becomes 65th Commander of USACE’s Chicago District

first_imgCol. Aaron Reisinger assumed command of the U.S. Army Corps of Engineers, Chicago District, from Col. Christopher Drew during a Change of Command ceremony at the Harold Washington Library, July 21, 2017. Reisinger becomes the 65th commander of the district, which has been responsible for water resources development in the Chicago metropolitan area since 1833.Brig. Gen. Mark Toy, commander of the Great Lakes and Ohio River Division, passed the guidon from outgoing commander to the incoming commander. This Army tradition symbolizes the passing of authority and responsibility from the departing commander to his successor.Reisinger comes to Chicago from Washington, D.C., where he was a strategist in the Stability and Humanitarian Affairs office of Special Operations and Low Intensity Conflict, Office of the Under Secretary of Defense for Policy.The Chicago District works on projects in a variety of focus areas including flood risk management and storm damage reduction, navigation, aquatic ecosystem restoration, regulatory, emergency management, and interagency and international services.Major projects include operating the electric barriers in the Chicago-area waterways, constructing the 10-billion-gallon McCook Reservoir, conducting the DuPage River Flood Risk Management Study, and implementing a variety of ecosystem restoration projects including ones at Horner Park and Fort Sheridan.last_img read more

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