On 10 November, Finnish media reported that Ailus’s “fringe benefits” included two luxury flats in central Helsinki and a brand new BMW.The reports alleged she failed to declare the full value of the flats to the tax office, and that “tender rules had been bent” in the acquisition of the BMW.When starting at Keva in 2009, Ailus reportedly requested to live in a €2.3m flat and last year requested an increase of €6,100 on her monthly salary of €18,900.Last week, local media also came out with claims that Ailus received child benefits from Finland and Norway simultaneously for eight years, which Norwegian officials are now claiming back.Iltalehti newspaper also reported Ailus had flown her friend to Lapland to accompany her on a work-related trip and charged Keva for his tickets.Ailus had allegedly also charged her family’s moving costs on Keva twice.Ailus maintained she was unaware she continued to be paid child benefit after she moved away from Norway.Although she said she would give up the flat in exchange for an increase in her salary, she also pointed out that she understood that, to “low-earning municipality workers and pensioners, the fringe benefits of pension fund management might seem excessive”.What is seen as the last straw in the evolution of the scandal is the meeting Ailus organised for her staff at Keva last Wednesday where she declared she had no intention of resigning, although Keva’s chairwoman, Laura Räty, announced that she no longer trusted Ailus.IPE asked Ailus for a comment last week, but she did not return the call.Chairwoman Räty told the media late Friday night that Ailus’s resignation was based on a lack of clarity in a range of issues.“There were unclarities in receiving social security, applying and interpreting competition law and in making acquisitions,” she said.“Issues like this have nothing to do with what kind of benefits are moderate and appropriate.”The scandal is likely to pave the way for ending political appointments in Finland.Ailus was appointed as managing director of the scheme in 2009 out of a group of 20 applicants.Her appointment has been described as political, as Ailus is a member of the Centre Party and arguably had less experience with the pensions industry than several other applicants. The managing director of Keva, the €35.3bn local government pension institution of Finland, resigned late on Friday night in the wake of a scandal focusing on her fringe benefits and personal expenses.Keva insures 1.3m Finns working, or having retired, from jobs at the local government, the state and the Evangelical Lutheran Church of Finland.Merja Ailus’s resignation agreement states that the details of the discussions between Ailus and Keva’s board late Friday night – i.e. the actual reasons why Ailus agreed to resign – remain confidential.However, the board’s decision to let Ailus go and pay her a compensation of €303,500 was based on a “lack of trust”, which emerged among board members after Finnish media accused Ailus of charging the institution for some of her personal expenses, failing to inform the tax office of the full value of her employee-sponsored flat and receiving child benefits from two countries simultaneously.
“Moreover, we were facing increasing costs, as the customer base of our licensed system was eroding.”Over 2012, NPF reported costs per participant of €310.Zimmerman said he expected these costs would come down over time, due to the benefits of scale at Aon Hewitt. He added that NPF did not have concrete plans to join a larger organisation, but noted that it was considering future cooperation.“Being a pension fund with many pensioners, we are vulnerable, in the opinion of supervisor De Nederlandsche Bank,” he said.NPF has approximately 8,035 pensioners and 3,080 deferred members, but only 650 active participants.They are affiliated with six complanies, including the large shipping company Mǿller Maersk.The scheme returned 9% on investments in 2012 and had a funding ratio of 108.9% as of the end of February. The €1.2bn Nedlloyd Pensioenfonds (NPF) has outsourced its administration to human resources firm and pensions provider Aon Hewitt. Aon Hewitt will also manage the pension fund’s annual actuarial reporting.The provider will run pensions and benefits administration for the scheme’s 12,000 participants on its standard platform Lifetime.Ton Zimmerman, the scheme’s director, said: “Our own administration system was not fully adequate any longer, and we doubted whether it would be able to accommodate the significant adjustments following all new pensions legislation.
Pensioenfonds Vervoer, the pension fund for the Dutch transport industry, has settled out of court with Goldman Sachs Asset Management (GSAM) in a long-running dispute concerning GSAM’s performance as the scheme’s former fiduciary asset manager. In July 2012, Vervoer issued a legal claim in the High Court in London against GSAM over a dispute about investments in a portable alpha structure and the implementation of an increased investment in global high-yield credit.In a statement released today, Vervoer said: “The parties have now reached an agreement through which the dispute has been settled to the satisfaction of both parties.”It said the terms and conditions of the settlement were confidential, and that, “accordingly, neither party will comment on them any further”. The lawsuit was scheduled to be heard in the High Court early next week.Vervoer decided to terminate its fiduciary management agreement with GSAM in 2010 over dissatisfaction with its performance.In 2011, it confirmed that Robeco would in future act as its fiduciary manager, and in July 2012 the fund confirmed it would seek damages from GSAM.Vervoer’s initial court filing of late summer 2012 accused GSAM of multiple breaches of contract during the asset manager’s time as its fiduciary manager and sought damages of €250m.GSAM rejected all allegations as “mischievous and wholly unfounded” and argued that Vervoer’s complaints came with “the benefit of perfect hindsight”.
The CHF27bn (€22.5bn) pension fund for the Swiss canton of Zurich (BVK) has assured its members it is “protected against possible price manipulations” as five major global banks are fined for alleged foreign currency market manipulation.For more than two years now, Swiss, UK and US authorities have been investigating cases of alleged manipulation of foreign exchange markets, while the BVK introduced several mechanisms to prevent such distortions in its own portfolio.In a statement, the pension fund said it was using “competition” as “penicillin to heal intransparent pricing” in foreign currency trading.Via a multi-banking platform, each transaction for the BVK is sent to 12 different banks, giving them 120 seconds to respond with a price for the requested service – hedging the US dollar against the Swiss franc, for example. The banks’ competitiveness is checked on a regular basis, and sometimes banks are replaced by others, it said.Further, the BVK said it was trading during the more liquid market hours between 10am and 12am rather than at the often used 4pm GMT, if possible.This means the fund does not have fixed hedging times at which market manipulations most often occur.It also means it has accepted slight price diversions, but these are “compensated over time”.The pension fund also stressed that it would “closely monitor further developments and current proceedings” and vowed to “enforce its own claims” should wrongdoing be detected.The BVK was one of the Swiss Pensionskassen to reclaim commissions providers might have accepted when investing for the pension fund.
Corné van Nijhuis, chief executive at the €25bn pension fund of ING, has resigned just eight months after first taking the job. In an announcement on its website, the scheme’s board said it had decided “by mutual agreement with Van Nijhuis” to terminate the relationship on 15 January.Van Nijhuis started his new job on 1 April, succeeding Albert Smolenaers, who had acted as interim chief executive, following the departure of Daan Heijting to Timeos, the provider for PGB, the industry-wide pension fund for the printing industry.Rob Oosterhout, vice-chairman at Pensioenfonds ING, declined to comment on the departure, and Van Nijhuis did not respond to requests for comment. Between 2002 and 2008, Van Nijhuis served as COO at insurer Swiss Life, where he went on to become chief executive.In 2010, he left his job at Swiss Life to be become chief executive of asset management at the €105bn asset manager MN, provider for the large metal schemes PMT and PME.After a year and a half, Van Nijhuis left MN.He subsequently started a consultancy for interim management, which he ran until his appointment at the ING scheme.
PFA Pension, Denmark’s largest commercial pension provider, revealed average returns on its unit-link pensions dipped in 2015 compared with the year before, and forecast still lower returns for the whole of 2016.Returns for 2015 on its unit link product PFA Plus ranged from 5.3% to 12.3% depending on customer age and product profile, the company said.In 2014, PFA Plus returns were been between 9% and 12.8%.Anders Damgaard, group finance director at PFA, said: “In spite of the turbulence on financial markets, we have come out of 2015 with some good returns for our customers.” However, looking ahead to full-year returns for 2016, PFA – which had group assets of DKK550bn (€73.7bn) at the end of last September – said it expected returns for customers to be lower than in 2015, though they would be satisfactory.Damgaard forecast PFA Plus returns would come in at between 2% and 7% for this full year, depending on risk profile, as long as prevailing interest rates stay at current levels.Financial turbulence particularly in China and new growth markets will make it harder to generate returns for all investors in the future, PFA said.Damgaard said 2016 had kicked off with some big falls on equity markets but added that he expected this trend to turn around.He said last year there had been unusually big differences in the how various shares on the market had fared, which meant PFA’s ability to choose the right companies had been decisive.“We have benefited a lot from the way we balanced our shares and therefore our investments – and thus customer returns – outperformed the market in general,” he said.Foreign shares, for example, outperformed the market average by 7 percentage points, he said.Investments in Danish and foreign equities had been responsible for 60% of the return for customers in 2015, while private equity, property and currency had produced the remaining 40%, PFA said.Meanwhile, bonds generated no return at all in the year, though the instruments had played an important role as a stabilising factor.Damgaard said PFA lowered its level of investment risk at the beginning of this year because of the prospect of high volatility in investment markets in the next few years.He said now was the time that the firm’s active management would show its strength, as passive investment can only be expected to produce a low or at best modest return.“But if you keep risk management tight and continue to balance investments between different asset types, as well as choose the right underlying companies and bonds, you can do better, and we put a lot of time and energy into this for it to succeed,” Damgaard said.
They also noted there was an unwillingness by Swedish municipalities to borrow more to fund projects.Local authorities’ indebtedness reduced their readiness to invest, and even though water and sanitation should be kept separate from other municipal activities, the report said these loans were regarded as part of the authorities’ total debt.The investment rate in water and sanitation was also limited because politicians, who were the ones to determine water tariffs, rejected raising these fees.“Private ownership of water and sanitation infrastructure is not legal in Sweden, which may also restrict private investment,” the investors behind the report said.They also noted that awareness of the risks and shortcomings within Swedish water and sanitation infrastructure was low, and needed to be raised among both the public and decision makers.“Water and sanitation is invisible infrastructure, which is expensive to maintain, and public awareness of it is low,” the report said.Separately, environmental data and campaign group CDP recently produced a report revealing that company boards are starting to take water security more seriously, with most now having board-level oversight of water issues. AP7 – which manages the default option in Sweden’s first pillar Premium Pension System – and SPP have published a report on the issue, together with other investors including AP3, the Swedish Church and Skandia.In the preliminary report entitled ‘Water as an Investment’, the investors identified obstacles to improving the water system.The report formed part of the five investors’ work on the sixth Sustainable Development Goal within the UN’s 2030 Agenda initiative, which called for clean water and sanitation for all.Willingness of external parties to put money into the infrastructure, however, was not them problem, the Swedish investors said.“During the course of work it has been found that there is more capital than there are investment opportunities within sustainable water and sanitation,” they stated. Swedish national pension fund AP7 says there is a huge need for investment in the Nordic country’s water and sewage networks, and is prepared to invest.In an article in Swedish financial newspaper Dagens Industri, Richard Gröttheim, chief executive of AP7, and Staffan Hansén, chief executive of pensions and savings firm SPP, said: “The water situation in Sweden is more serious than for decades. Authorities regularly warn about contaminated drinking water, floods and water shortage.”Local authorities in Sweden probably needed national coordination and support to meet the challenge of the declining water infrastructure, the two men wrote.“It is about long-term investments that require specialist competence and extend over many mandate periods,” they said. “But when decisions are taken, we would like to contribute with the funding.”
“We have to talk to our counterparts in the unions first – only later we will see which structures and vehicles we will use to wrap it in,” said Rainer Dulger, president of the employer association for the metal industry GesamtMetall.Ralf Sikorski, board member at the union for the mining, chemical and energy industries, added: “The BRSG is not even a year old and the new pension plans will not have to be negotiated to last until the next collective bargaining negotiations but for the long-term.”These sentiments were seconded by various industry representatives both employers and employees.Last week, two provider consortiums presented their solutions for vehicles to house the new pension plans. However, a representative of the largest German union group Ver.di offered an insight into a potential conflict between the negotiating parties. German unions and employer representatives have urged providers to give them space and time for negotiations on new pension plans.The social partners have welcomed the new defined contribution plans that are now available under last year’s Betriebsrentenstärkungsgesetz (BRSG) reforms.Stakeholders at this year’s occupational pension conference hosted by German daily newspaper Handelsblatt in Berlin repeatedly emphasised the phrase “don’t call us, we call you”, with regards to new products being set up.Under the BRSG these plans, known as Tarifpläne, can only be jointly negotiated and set up by employer and employee representatives (the Tarifparteien) from and for each industry. Credit: Dietmar Gust Andrea Kocsis, Ver.di, speaks at the 2018 Handelsblatt conference in BerlinAndrea Kocsis, deputy chairperson at Ver.di, said: “We have met with a lot of resistance from employers in SMEs [small and medium-sized enterprises] when mentioning negotiations about the new pension plans.”She pointed out that the union group would like to “test” the new defined contribution plans in three industries: commerce, logistics and haulage, and security services.GesamtMetall’s Dulger said resistance had not been seen in all industries: “SMEs are welcoming the new pension plans as they are competing with larger companies that already have occupational pension offerings.”The new pension plans – which rid companies of funding liabilities – can help level the playing field for much needed well-trained employees and managers, he said.
For the Swiss tender – which is also for a passive manager – search QN-2509 states the benchmark as the SPI index.In both cases, managers pitching for the business should have at least $750m under management in the strategy and at least $1bn under management across the firm.Managers should have a track record of at least four years, but the investor said it would prefer those with at least a 10-year record.The maximum tracking error is 4% for both mandates. Performance should be stated gross of fees to 31 January 2019.The deadline for submissions for both mandates is 5pm UK time on 14 February.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] Credit: Erich Westendarp A Swiss pension fund is seeking managers for allocations to domestic and global developed market equities, via IPE Quest.The investor plans to allocate $100m (€88.2m) to the developed market equities mandate and CHF100m (€88.1m) to the Swiss equities mandate.According to search QN-2510, the pension fund is interested in allocating to an all-cap or large-cap passive global equities manager.The benchmark for the global mandate is the MSCI World ex Switzerland index.
“Our selection process means that we have greatly reduced the number of companies we are invested in,” said the fund.Kåpan has also doubled its investments in green bonds over the course of 2019, which now account to 4% of the total market value of Swedish fixed interest investments in its portfolio.In September, the pension fund invested SEK260m in a new environmental, social and governance focused (ESG) fund — the M&G Global High Yield ESG Bond Fund — which has a three-stage screening process for potential investees focusing on ESG factors.Kåpan explained that it is also taking steps to become a more active investor, saying that it has conducted “impact dialogues” with 48 companies in 2019 regarding their environmental practices, with the help of its external supplier ISS ESG – and invested in 26 of these firms.“During the year, we also conducted impact dialogues with two Nordic banks where we have holdings, primarily within the fixed income management, regarding their need to strengthen their ESG work,” the pension fund said. Swedish pension fund for government staff Kåpan Pensioner has extended its sustainability work, doubling its holdings in green bonds and boosting investments in firms that have won awards for sustainability.The SEK75bn (€7bn) pension fund also announced that at the end of 2018, it had switched from having a large proportion of its global equities in passive index funds to owning them directly.Kåpan said in a statement: “We conduct impact dialogues and will soon take a more active ownership responsibility in the Swedish and global listed companies we have invested in.”The fund said the move allowed it to actively choose companies from a sustainability perspective and increase its influence as an investor.