29 Sep

Asset-backed arrangements set to increase on dismal triennial valuations

first_imgThis has added around £2bn (€2.4bn) to the value of ABC arrangements, taking the total to more than £7bn.The firm expects this year to add substantially more given the funding situation from 2013 triennial reviews.Actuarial funding levels for schemes with 2013 dates, which will be finalised this year, will see substantial falls due to market conditions.The fall in funding for schemes that ran valuations in 2009 and 2012 was not as drastic.David Fripp, pensions partner at KPMG, said market conditions were still partly responsible for last year’s growth.“These conditions have persisted into 2014, and we’re finding that increasing numbers of companies and trustees are turning to ABCs to fund part or all of their deficits,” he said.KPMG also said the expectation of rising Gilt yields would make the arrangements even more popular.Schemes are concerned about current ‘artifical’ deficits and future surpluses, which can be alleviated by ABCs.KPMG’s analysis also found the average size of ABC arrangements fell substantially as popularity increased, as smaller schemes gained access to the option.The average ABC value between September 2012 and October 2013 was just £83m compared with £141m in 2010-11 and £323m in 2009-10.This was combined with an increase in the proportion of scheme assets being used.Five arrangements were valued at more than 20% of scheme assets in 2013, compared with two in 2012, and one a year earlier.Also increasing in popularity were longer-term arrangements, with 2013 seeing three deals reach the maximum 25 years.Five ABCs were put in place with terms ranging between 20 and 25 years, the first in more than two years.KPMG said updated guidance from the Pensions Regulator (TPR), released last year, would also increase interest in ABCs.Fripp added: “The guidance provides a helpful framework for companies and trustee boards to assess ABC proposals, which may make the implementation process more straightforward.” The use of asset-backed funding arrangements in UK pension schemes is expected to grow further this year after 2013 saw a substantial rise in the number of arrangements.Research by consultancy KPMG showed there were more than 20 arrangements put in place in the year from October 2012, accounting for almost half the number of deals to date.Its analysis found 13 deals were announced in the first half of 2013, the highest for any half-year.By comparison, only five were announced in the same period in 2012.last_img read more

29 Sep

AP3 says buffer fund overhaul could hurt current, future pensions

first_imgSince 2009, four of the national buffer funds – AP1, AP2, AP3 and AP4 – had paid out nearly SEK90bn (€9.8bn) to close the gap between contributions and payments in the mandatory pay-as-you-go pension system, she said.“Seen against that background, we find it difficult to understand that the Pensions Group has proposed such wide-ranging changes to the current system of AP funds,” Hessius said.She acknowledged that the system did need to be reviewed from time to time.“But we are concerned the recommendations will have a negative impact on both current and future pensions,” she said.In March this year, the cross-party Pension Group decided to accept many of the recommendations from the 2012 inquiry into the buffer fund system chaired by Mats Langensjö, and close two of the five funds concerned – AP1 to AP4 and AP6.The overhaul encompasses the investment strategy and governance structures of the funds.A further review is being carried out to help decide which two funds will be wound up.AP3 said in its interim report that it had generated an average annual return of 8.2% over the last five years, measured at the end of June – compared with 8.5% at the same point last year – and 6.4%, compared with 6%, over the last 10 years. This, said AP3, compared with annual increases of 1.6% and 2.5% in the income index over these periods.In the January-to-June period, AP3’s profit rose to SEK16.57bn from SEK12.46bn, or 6.5% after expenses, up from 5.4% in the same period last year, the pension fund said.Fund capital climbed to SEK14.1bn between January and June to SEK272.58bn, it said, with SEK2.47bn having been transferred to the Swedish Pensions Agency during the period.AP3 said it cut its equity exposure in the first six months of the year to 49% from 52.6%, reallocating funds mainly to fixed income as well as to property, infrastructure and risk premium strategies.It said it was continuing to diversify the portfolio to make it more robust.Fixed income exposure rose 8.6 percentage points to 22.7% in the first half, reflecting “a cautious investment approach in the light of asset valuations, risk appetite and our assessment of macroeconomic conditions”. Sweden’s third national pensions buffer fund AP3 has criticised the government’s decision to whittle down the buffer fund system to just three funds, citing its own returns record.Releasing financial figures for the first half of this year, AP3’s chief executive Kerstin Hessius said: “Our asset management strategy has worked well, resulting in high returns and low costs compared with similar pension funds at international level and a doubling of fund capital since inception in 2001.”She added: “We have made a strong contribution to the financing of the pension system by generating returns that have grown faster than the income index.”The income index is a Swedish indicator used to keep pensions in line with inflation. last_img read more

10 Jan

Guardiola rates City star Aguero ahead of Salah

first_imgLiverpool winger Salah has made a more modest start to 2018-19, certainly in comparison to last season’s 44-goal campaign, with just three goals to date.And, while Guardiola has no doubt that Salah remains a lethal threat, the City manager believes the Egypt star must score prolifically over a period of multiple years to match Aguero’s achievements.“He (Salah) is younger and it was his first year back in England since his time at Chelsea, so we will see in the future,” said Guardiola, talking ahead of City’s visit to Liverpool in the Premier League on Sunday.“But a guy who has the quality to score 50 goals in a season always has that quality. But football is all about ups and downs.“Salah remains an excellent player and will score goals in the future. When you are in there scenting goals sometimes this happens.“Sergio has scored a lot of goals but there were periods when he didn’t score goals.“How many years has Sergio scored all those goals, eight or nine years? For Salah it was the first one so we will see in seven or eight years.”Another City forward, Raheem Sterling, should be involved at Anfield despite Guardiola having left him out of one of the two trips to Liverpool last season.Sterling, a former Liverpool player, was given a torrid reception from his former club’s supporters who were unimpressed at the manner of his leaving Merseyside.– Prime contenders –But Guardiola believes that coping in the face of such adversity is part of the 23-year-old’s learning curve.“He has played against Liverpool at Anfield before,” said Guardiola. “He didn’t start last season for the first time but that was for a tactical reason.“I don’t think about him differently for this game because he’s a former Liverpool player. Maybe it’s affected him before, maybe it hasn’t. I don’t know because we haven’t spoken about it.“But even if that’s happened because he was so young, he has to learn. Hopefully he will be here for a long time with us, so he will go many times to Anfield. That’s normal.“He grew up as a player at Liverpool, he has good memories of his career there. Of course Liverpool fans want him to play bad, and he doesn’t want to play bad, he wants to play good.”Liverpool, over the first two months of the season at least, have emerged as the most potent challengers to City’s hopes of retaining the Premier League title won in such spectacular fashion last season.And while Guardiola, diplomatically, name checked the division’s other leading sides, he did concede that he expected Jurgen Klopp’s team to be prime contenders in this season.“Liverpool are a strong team but so are Chelsea, and Arsenal, Manchester United. Tottenham as well,” Guardiola said.“But for us, for Manchester City, we want to defend our title, and they are contenders. Liverpool have started so well, they have the same points us, but we were expecting that all along.“Liverpool were an excellent team last season and since then they have bought some more incredible players to fight against us.”0Shares0000(Visited 1 times, 1 visits today) 0Shares0000Manchester City manager Pep Guardiola believes Sergio Aguero is a better player than Mohamed Salah © AFP / Daniel ROLANDMANCHESTER, United Kingdom, Oct 7 – Pep Guardiola insists Liverpool’s Mohamed Salah has lost none of his goal-scoring prowess, but the Manchester City boss claims the Egyptian must repeat last season’s prodigious feats before he can match Sergio Aguero.City forward Aguero, the club’s all-time record scorer, has opened the new campaign in predictable fashion, scoring eight times in 10 games already this season.last_img read more