The agreement would see a vesting period for pension rights of three years for workers captured by the Directive, a controversial timeframe, as it is lower than those applied by a number of member states for domestic workers.Germany, for example, currently has a five-year vesting period, leading consultancy Mercer to criticise the Directive as an attempt to lower the qualifying timeframe “through the backdoor”.It is unclear whether the European Parliament will vote on the Directive before the parliamentary elections in 2014.However, once passed, member states will have four years to apply the changes to national law.This is not the Commission’s first attempt to pass the Portability Directive, first published eight years ago but abandoned following resistance from a number of member states. The European Commission’s Portability Directive is one step closer to reality after representatives from the European Parliament and EU member states reached an agreement on some of the details of the legislation.The Directive – revived after internal markets commissioner Michel Barnier abandoned plans to include capital requirements for pension funds under the revised IORP Directive – will create equal footing for workers moving among member states, and those who work across European borders.MEP Ria Oomen-Ruijten said workers could now enjoy “full” pension rights if they moved within the single market.The Dutch politician – a member of the European People’s Party faction within Parliament and the rapporteur responsible for the Directive – added: “The legislation will help to eliminate barriers to the free movement of workers.”
German scheme tenders €100m investment-grade bond mandate
Interested parties should state performance, gross of fees, until the end of September.The closing date for applications is 9 December.For full information, please go to http://www.ipe-quest.com/search.htm An undisclosed corporate pension fund in Germany has tendered a €100m (€80.4m) US investment-grade corporate bond mandate using IPE-Quest.The mandate calls for the benchmark to be the BofA Merrill Lynch 10+ Year AAA-A US Corporate Index, EUR hedged (Bloomberg Ticker: C910 Index).Fund managers must have an absolute minimum track record of six years – the preferred minimum track record is six years.They should also have at least $1bn in assets under management (AUM) for the mandate itself.
Railpen appoints APG industry veteran to board
She was also a professor of finance at Maastricht University.Chris Hitchen, chief executive at RPMI, said he was “thrilled” Kemna had agreed to join the Railpen Investments board.“I have always been a great admirer of Dutch institutions, and Angelien’s great personal experience and insight will be invaluable to us,” he said.Paul Trickett, chairman of the Railpen Investments Board, added: “Welcoming Angelien to the team is another great step forward for us as a business as we continue with our Investment Transformation Programme.” RPMI and Railpen Investments, which has approximately £20bn (€26bn) in assets under management, run the Railways Pension Schemes on behalf of their parent, the Railways Pensions Trustee Company Limited. Railpen Investments has appointed industry veteran Angelien Kemna to its board in a bid to further strengthen its governance.Kemna currently holds the position of chief finance and risk officer at €396bn Dutch asset manager APG, in addition to serving as a member of the organisation’s executive board.She also served as CIO at APG until 2014.Before then, she was chief executive at ING Investment Management Europe, and held a number of investment positions at Robeco Group.
UK regulator warns of action against schemes neglecting quality standards
Small and medium-sized UK defined contribution (DC) pension funds continue to lag behind on quality standards as The Pensions Regulator (TPR) promises action.In its annual survey of DC and hybrid schemes, the regulator questioned schemes on their awareness, knowledge and implementation of 31 quality features identified by TPR as necessary to secure good member outcomes.TPR questioned whether schemes were aware as to the changes to legislation in April that introduce legal minimum administration and governance standards, as well as the 75-basis-point charge cap.The survey showed that the majority of small schemes (52%) know little or nothing about the 31 quality features, while 22% are not even aware of them – a drop of 9 percentage points from 2014. Andrew Warwick-Thompson, executive director for DC at the regulator, said the results were similar to previous research and that the regulator remained concerned for the schemes.He said TPR would be working with government bodies to find a solution to the lack of progress and urged small employers to choose master trusts for auto-enrolment.Among medium schemes, awareness was slightly better, with only 6% unaware, but 32% knowing little to nothing.However, among large schemes and auto-enrolment master trusts, awareness and knowledge was strong.One one-tenth of larger DC schemes – generally defined as having more than 1,000 members – said they knew little.Master trusts in particular were found to know quite a lot or a lot about the quality features – with all respondents answering positively.Some 12% or smaller schemes said they had no plans to review their organisations against the 31 quality features, half the proportion from last year’s survey. Two-fifths have already reviewed, and a further one-fifth plan to.Around 10% of medium schemes said they had no plans in place.Warwick-Thompson said the regulator remained concerned about schemes failing to understand the code.“In relation to the smaller schemes, we have to accept many of them will never achieve the necessary standards,” he said.“One of our objectives is to work with our government partners to [establish] what needs to be done to address that block of schemes that just don’t seem to be making necessary progress towards being quality schemes. You need to understand the code.”TPR said there were similar patterns when teaching scheme knowledge on the legislative changes that came into effect in April.Warwick-Thompson added: “There are specific legal requirements in relation to the chair’s statement, governance standards and charge controls.“Trustees must make sure they are compliant with those. This is no longer a voluntary exercise with a voluntary checklist.”Of the 31 features, smaller schemes had an average of 16, compared with 20 for medium, 24 for large and 25 for master trusts.The most neglected features were around default investment strategies, administration systems and trustee knowledge.Only one-fifth of small schemes demonstrated the default strategy was suitable for the needs of the membership.“A number of areas where schemes have tended to perform the most poorly are now subject to new legal standards,” Warwick-Thompson said.“Where schemes are falling short, we expect them to improve, or we may take enforcement action against them.”
BNP Paribas experiments with blockchain for fund trading
BNP Paribas Asset Management has announced a successful test of a blockchain-based system for fund distribution.The test, conducted late last year in Luxembourg, involved a “full end-to-end fund transaction” using sister company BNP Paribas Securities Services’ blockchain programme Fund Link.This was developed last year in partnership with AXA Investment Management and allows all data and paperwork relevant to the transaction to be held in a decentralised digital ledger, available to all parties.BNP Paribas Asset Management’s experiment also made use of FundsDLT, a fund transaction platform developed by tech companies connected to the Luxembourg Stock Exchange, POST Group and KPMG. The asset manager claimed in a press release issued this morning that it was “among the first leading global asset managers to take part in this prototype testing”.Fabrice Silberzan, chief operating officer at BNP Paribas Asset Management, said the blockchain technology would provide investors with quicker transactions and the asset manager with “a sleeker, more streamlined system underpinned by technology and relevant for all fund types and geographies”.Said Fihri of KPMG Luxembourg said American, British and German companies were interested in working with the FundsDLT tool for product distribution.The news follows the announcement earlier this week that Lombard Odier Investment Management had conducted a fixed income trade using blockchain technology, one of the first asset managers to do so.Other firms are working on other uses for the technology, including for private equity deals, equity index data sharing, and pensions administration.
University staff warn of fresh strike action over contributions [updated]
He added: “Alongside the huge amount of work needed to progress matters through the committee, we have spent many, many hours negotiating both formally and informally with the employer representatives.“But the unfortunate truth of negotiating for a union is that on substantive matters, especially when money [is] concerned, the other side will only listen properly when strike action is imminent.”The UCU will ballot members on strike action from 9 September until 30 October, coinciding with the start of the 2019-20 academic year.Update, 5:30pm 23 August: The UCU rejected a compromise offer from the UUK during negotiations, according to a statement from the employer organisation published this afternoon.The UUK said it had offered to shoulder an additional 0.5% of the contribution rate. This would have meant members paid 9.1% and employers 21.6%.“The UCU negotiators indicated they were unwilling to compromise, refused to consult their members over the alternative offer, and consequently rejected it,” the UUK statement said.A spokesperson for the employer organisation added: “It appears that UCU’s ‘no detriment’ position means no compromise.“By rejecting the alternative offer proposed by employers, UCU have passed up an opportunity to conclude the valuation with a lower member contribution rate, in line with what the Joint Expert Panel proposed, and 1.3% lower than the rate that otherwise would have applied under the 2017 valuation backstop.”Joint Expert PanelThe union led nationwide strikes last year in protest at the proposed closure of USS’ defined benefit section. The proposal was later scrapped and the JEP set up.In September 2018 the JEP , chaired by Joanne Segars, reported that USS could reduce its deficit through implementing a number of changes, including taking more investment risk and re-evaluating the sponsor covenant. If all its measures were implemented, the JEP said total contributions could be kept to 29.2% – an increase on the levels at the start of the current dispute, but lower than any other proposal.The UCU wants the JEP’s proposals to be implemented in full. Jo Grady, UCU general secretary, said USS members “should not have to pay” for employers’ “failings” with regard to the JEP proposals.“Universities have passed up an opportunity to bring us back from the brink of another round of strikes,” Grady said. “We are incredibly disappointed they have pushed to burden members with unnecessary and unfair extra costs. These increases have serious consequences and may force some members to leave USS, jeopardising not only individual retirement plans but the future of the scheme as a whole.” The contribution rates were identical to those put forward by UUK at the end of July , which it said would take employers “to the brink in terms of their ability to sustainably maintain contributions to USS”. Source: Warwick University UCU branch Staff at Warwick University on strike in 2018 over proposals to close the DB section of USSHowever, the University and College Union (UCU), on behalf of members of the £68.5bn (€75.6bn) scheme, said it would ballot members at 69 higher education institutions across the UK on possible strike action in protest at the increase.It has argued for much of the past two years that its members should not be forced to pay contributions higher than the current level of 8% of salary, and that universities should foot the bill for any increases.In a statement, the union said the member contribution would rise to 11% of salary from October 2021 if the two sides could not agree an alternative based on the scheduled March 2020 valuation.Sam Marsh, a member of the JNC representing the union, claimed on Twitter that the JNC’s decision was the result of the two sides being unable to agree on an approach, and the committee’s chairman Sir Andrew Cubie casting the deciding vote. Staff at UK universities have warned of nationwide strike action in protest over higher contribution rates imposed by the Universities Superannuation Scheme (USS).The University and College Union (UCU) made the threat after USS’ Joint Negotiating Committee (JNC) agreed yesterday to raise contributions to 21.1% for employers and 9.6% for members.A spokesperson for Universities UK, which represents employers, said the JNC’s contribution plan provided “a fair, short-term solution, acceptable to the Pensions Regulator and the USS trustee”.It would also allow time for the Joint Expert Panel (JEP) – set up last year in an effort to resolve disagreements over USS’ 2017 valuation – to “suggest options for the longer term” that could inform the 2020 scheme valuation, the spokesperson added.
Danica poaches AP Pension COO to head up new development unit
Krogh Petersen said: “We are gathering development activities because we want to continue to be one step ahead and deliver the best and most innovative solutions to our customers.”Bjerre had experience with the areas he was now going to be responsible for, and Danica Pension knew him from his time in the company, the chief executive added.“We are therefore sure that he, together with talented colleagues, is the right person to ensure that we continue to provide the best solutions in the market in the future, which will make our clients feel secure about their pension schemes,” Krogh Petersen said. Danica Pension is creating a new department by bringing together all its customer-facing development activities — digital, robotics, sales development and health solutions — and has poached a top manager from rival AP Pension to lead it.Jesper Bjerre, chief operating officer at commercial labour-market pension provider AP Pension, has been hired by the Danske Bank subsidiary to take up the new role of chief development officer on 1 December.The recruitment means a return to Danica Pension for Bjerre, who worked at the company until two years ago when he switched employer to become a member of AP Pension’s executive board.At Danica Pension, Bjerre will report directly to chief executive Ole Krogh Petersen.
Oil price commentary: ‘Pressure to cut global production will intensify’
Nadège Dufossé, deputy global head of multi-asset at Candriam, said that for the oil price to rebound there would need to be higher production cuts from 1 May, “as well as better perspectives on demand increase that should follow the easing of lockdown in various countries.”At PGIM, David Winans, credit analyst for the fixed income division’s US investment grade credit research team, said yesterday’s price move, although “very painful”, could not last for long “since producers are switching off wells as we speak”.“The ‘supply shock’ from the OPEC+ collapse in March was really a mirage, the demand shock from COVID-19 is overwhelming everything,” he added. “Ultimately, the path for oil prices is going to follow the path of this virus. Until demand shows some sign of life, oil prices will likely remain on life support.”Winners and losersAudra Delport, deputy head of credit research at Federated Hermes, said the the impact of low oil prices would be mostly felt in the US high yield energy sector, although it would vary depending on the quality of the producers.“In addition, the reduced oil production in response to lower prices will benefit natural gas producers as associated-gas production in the US declines in the upcoming months, driving natural gas prices higher,” she said.“Overall, companies that have scale and additional levers to pull such as dividend reductions, growth capital expenditures and asset sales will be better off, while smaller higher cost producers with upcoming debt maturities will be most impacted.”Nordea’s Galy referred to winners and losers when noting that the generally much lower oil prices “translates into a transfer of wealth from Russia, Saudi Arabia and allies to the rest of the world”.Florence Pisani, global head of economic research at Candriam, said: “The current developments validate the Saudi strategy: the price collapse will eliminate many US producers from the market, forcing the US to contribute to the downward adjustment of world production.”Looking for IPE’s latest magazine? Read the digital edition here. With the West Texas Intermediate benchmark crashing below $0 for the first time yesterday to reach -$40 a barrel and global oil markets remaining under pressure today, asset managers have commented to note that further production cuts will be needed for the oil price to rebound, and that low prices spell winners and losers.Sébastien Galy, senior macro strategist at Nordea Asset Management, said yesterday’s WTI drop – which made for a “historic day” in the oil market – was likely connected to storage issues, as people consume far less amid the quarantines and lockdowns, and to credit risk.“In the coming days and weeks, we will see increased pressure for another deal with OPEC+ and to reduce overall global production, potentially involving the Americans,” he said. ‘test’ “This could eventually have a huge impact on oil prices. The opportunity set for fund managers is vast, particularly in emerging markets, and the dynamics of oil prices mean some agility in rebalancing portfolios will be required.”
Brisbane median house price hits record high
Natasha and Andrew Reid, with their kids Jessica, 12, and Stephanie, 10, have their Holland Park West house up for sale. Picture: AAP Image Steve Pohlner.BRISBANE’S median house price has hit a new high, with market growth up 30 per cent in the past five years.The latest Real Estate Institute of Queensland Market Monitor, to be released today, reveals Brisbane’s median house price increased 2.5 per cent in the past year to hit a record-breaking $673,000.REIQ chief executive Antonia Mercorella said the market in the Brisbane local government area (LGA) had grown almost 30 per cent over the past five years, thanks to “steady, sustainable growth’’ giving buyers confidence.House prices in the Greater Brisbane market, which includes Brisbane, Ipswich, Logan, Moreton Bay and Redland, rose 2.8 per cent in the past year and 1 per cent in the June quarter to $524,000.Within Brisbane itself, the median house price increased by 0.9 per cent in the quarter.The REIQ has released their latest median house price figures.“Over the medium term, the Greater Brisbane house market grew 20.1 per cent or the equivalent to nearly $88,000 for the past five years,’’ Ms Mercorella said.The REIQ figures revealed that cheap and cheerful Caboolture South was the top performing suburb within Greater Brisbane during the June quarter with a massive 30.4 per cent increase in its median house price to a still affordable $327,500.The REIQ has released their latest median house price figures.LJ Hooker Morayfield/Caboolture agent Greg Meiers said Caboolture South market was popular with investors.“It is close to the train, the shops, schools, and houses in the area get good rental yields,” he said. “I think a lot of people will look back in 20 years and wonder why they didn’t buy up here.”Holland Park West was the best performer in the Brisbane LGA during the June quarter with its median house price up by 24.5 per cent to $842,000.The new data was welcomed by Tash and Andrew Reid, who are selling their house at 7 Pickthorne St in Holland Park West.Natasha and Andrew Reid, with their kids Jessica, 12, and Stephanie, 10, have their Holland Park West house up for sale. Picture: AAP Image Steve Pohlner“We had been living in a smaller house at Mount Gravatt East and upgraded to this house in 2006,” Mrs Reid said.“It is such a lovely area – 50m to the bus, you can walk to the shops, the school, there is a park across the road and it’s a great family area. But we are upgrading again, back to Mount Gravatt East. We have both thought that maybe we are mad leaving because it is just so convenient.”The REIQ has released their latest median house price figures.The REIQ report also reveals buyers were keen to get as much land as they could, with the median house price skyrocketing 24.9 per cent to $1.28 million for houses on more than 2500sq m of land during the June quarter.More from newsParks and wildlife the new lust-haves post coronavirus16 hours agoNoosa’s best beachfront penthouse is about to hit the market16 hours agoCoastal markets were still strong performers with the state’s highest median house price increase for the quarter at Hope Island on the Gold Coast. The median increased by 38.2 per cent $950,000.Sunshine Coast was not far behind with the median house price in Noosa Heads up by 32.2 per cent to $1.19 million.The unit market did not do as well as the housing market, although there were some standout performers with the median unit price in Rochedale increasing 51.6 per cent to $705,000 and in Marsden by 22.5 per cent to $343,900 in the past 12 months.Ms Mercorella said supply continued to outstrip demand in the unit market in parts of Brisbane, and more broadly across Greater Brisbane.“However, with strong net internal migration to the southeast corner of Queensland and strong overseas migration coming to the southern parts of the state, we are optimistic that unit supply will be absorbed,’’ she said.The REIQ has released their latest median house price figures.The Greater Brisbane unit market grew by 1.3 per cent, to a median of $405,000 in the June quarter and by 1.4 per cent in the past 12 months.Ms Mercorella said the only local government area to experience a drop in unit prices in the June quarter was Logan, where it fell 1.3 per cent.Toowong was the strongest performer in the unit market for the quarter. Its median up 31.1 per cent to $540,000.Statewide, that was followed by Kings Beach on the Sunshine Coast where the median unit price increased by 27.4 per cent to $500,000.In terms of vacant land, the latest Oliver Hume Quarterly Market Insights national land market report shows median land prices across southeast Queensland have reached $240,013, up about $7000 from the same period last year. Brisbane and the Gold Coast recorded the highest median land prices, $356,750 and $334,300 respectively.“Interstate migration continues to highlight the Queensland market … with many of our southern counterparts seeking greener pastures,” Oliver Hume national head of research George Bougias said. – Michelle Hele and Samantha HealyFOLLOW @COURIERMAILREALESTATE ON FACEBOOK
Online search habits reveal a demand for dual living properties
Jan and Gary Harvey are selling their house, which has dual living capabilities.Gone are the days when the kids are booted out the door the moment they finish school. They’re staying home for longer — and the grandparents are moving in too. Our online search habits have uncovered a growing desire for houses suited to dual living, as multiple generations begin to live under the one roof. Realestate.com.au data has revealed Queensland’s top keyword search terms last year for browsing houses online, with variants of searches relating to dual living appearing multiple times in the list. Bernard Salt speculated a cultural shift contributed to the increased interest in dual living.Mr Salt said while property affordability was a factor, he believed a cultural shift that resulted in more relaxed parent-child relationships could have contributed to the trend.“It was different two generations ago, people wanted to get out of their parents’ houses,” he said.“There was more conflict between Baby Boomers and 20-somethings with their parents about living with a partner.“When that became not an issue they stayed home longer.“Now, some people want to live as extended family, some people want to have their Millennials living at home.” Gary and Jan Harvey in the dual living part of their home.While it is hardly surprising the top terms were pool (499,122 searches), swimming pool (340,579) and waterfront (96,005), variations of granny flat (64,372), dual living (54,807), and duplex (50,108) also appeared in the top 10. Place Woolloongabba director James Curtain said he had seen a rise in the popularity of dual-living properties over the past few years, and he didn’t expect it to disappear any time soon. “Teenagers are staying home for longer — they financially need to — so parents are assisting, but you still need that level of separation,” Mr Curtain said. REA Group chief economist Nerida Conisbee agreed that children were staying home longer — sometimes with their own families — and that older generations were moving in with their children. McGrath Paddington agent Reuben Packer-Hill said dual living properties receive up to 25 per cent more interest.Jan and Gary Harvey are selling their house at 53 Marriott St, Coorparoo, which is set up for dual living.The couple renovated the house when their children were teenagers, and they were sure to make sure it had a self-contained bottom floor.In the years that followed, one of their children moved back into the space with his wife for six months, and on another occasion they had another family move in while they were building a house.“They had separate side access so they could get on with their life and we could get on with ours, but we could come together when we wanted to,” Mrs Harvey said.Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 1:44Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -1:44 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD540p540p288p288p180p180pAutoA, 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 Rate1xFullscreenHow to bid at auction for your dream home? 01:45 The main part of the house at 53 Marriott St, Coorparoo.However, The Demographics Group’s managing director, demographer Bernard Salt, said multiple generations moving in with one another was a result of “Australian society evolving and splintering”. “The old model of mum, dad and the kids (living together) … (is) still very popular (but) seems to be evolving and changing,” Mr Salt said.“I think the influence of migrant groups like Greeks, Italians, et cetera, have introduced the idea of multiple generations sharing the same premises.”More from newsParks and wildlife the new lust-haves post coronavirus14 hours agoNoosa’s best beachfront penthouse is about to hit the market14 hours ago The downstairs dual living area of 53 Marriott St.McGrath Paddington agent Reuben Packer-Hill is marketing a property with two self-contained flats at 19 Taringa Pde, Indooroopilly, and said homes with dual-living capabilities often attracted “20-25 per cent more buyer interest”.“Rising household costs and the lack of good quality retirement options in the suburbs, has influenced multi-generational families to consider moving in (together),” Mr Packer-Hill said.“Some of the benefits include saving on mortgage payments, helping with the care of younger children and enjoying the company of one another.”