Month: September 2020

  • Emphasis on governance improves returns at leading Spanish pension funds

    first_imgSpanish pension funds with strong governance structures have enjoyed better investment performance than those without, a study by Towers Watson has revealed.The study – the first of its kind to be carried out in Spain, according to the pension consultants – attracted responses from 27 funds, worth an estimated €16bn in total. The responses account for around half the €31bn in assets held by the country’s private pensions industry and the majority of the €24bn held by the country’s 40 largest.Towers Watson asked the funds whether they have a dedicated structure for analysing investments, whether and how often they review their investment policy, and if they have a risk budget, among other questions.Average performance figures for the 12 months to 30 June 2013 were then compared with those for the Spanish occupational pensions industry as a whole, using data from INVERCO, Spain’s investment and pension association. According to Towers Watson, the average asset allocation of Spanish corporate  pension funds was roughly split between 75% in fixed income and 25% in equities.Of the 40 largest funds responding to the survey, the vast majority – 82% – engaged expert advice or had in place formalised structures to manage investments, while within this group, 39% of respondents had a dedicated body, such as an investment committee.Within a drafted investment policy, deciding a target income which the pension fund was expected to beat also improved performance, not only compared with the pensions industry as a whole, but also compared with the forty largest funds lacking a target. Of the funds responding to the survey, 57% used matching or beating of inflation as a goal.Furthermore, 79% put in place a risk budget in order to achieve their agreed investment target and 75% conducted monitoring exercises on their fund’s investments, either monthly or quarterly.David Cienfuegos, head of investment, Towers Watson Spain, said: “The empirical results of the survey show that the more dedicated the control commissions relating to investments, and the more developed the governance structures for investing, the better the results.“The Top 40 have a governance structure that manages risk better than the market as a whole,” he added.The median return over five years for the top 40 respondents was 3.75% per year, compared with 2.86% per year for Spanish occupational pension funds as a whole.Their emphasis on strong governance also resulted in better risk management, as shown by better worst-case results.The 95th percentile in the top 40 respondents returned 1.21% per year over five years, compared with -1.24% per year for the worst performers across the industry.“But even without these outliers, the difference in performance over five years is 2.45% per annum, which is a very big margin,” said Cienfuegos.Engaging expert advice also appeared to produce a superior performance.For those top 40 funds using expert advice, the median result over five years was 4.10% per year, compared with 2.86% per year for the pensions industry as a whole, though over one year this was 7.96% compared with 8.13%, a slight underperformance.The performance of the top 40 funds with a clearly defined investment objective was then compared with the performance of those in the top 40 without such an objective: their performance was superior over all time periods.Over one year, the median return for those pension funds with a defined investment objective was 8.16% compared with 6.70% for those without. Over three years, the annualised respective returns were 4.77% and 2.91% and over five years, 4.16% and 2.43%.The frequency with which pension funds review their investment policy was also investigated, as was its impact on results: over two-thirds (68%) review the policy at least once a year.The results over one, three and five years for those top 40 funds reviewing their investment policy at least annually were then compared with the average performance for Spanish occupational funds as a whole.Cienfuegos said: “Those pension funds which carry out a revision of the investment policy at least annually, achieve not only better returns than the sector in the short, medium and long term, but also get a better return in the worst-case scenarios – that is, they get better risk management.”last_img read more

  • Funding drop of at least 3 percentage points ahead, Dutch schemes warned

    first_img“As a result, the average pension fund lost between 2 and 3 percentage points of funding.”The actuary argued that, if market rates remain at the current level, the official discount rate for liabilities – the three-month average of the market rate plus the ultimate forward rate (UFR) – would decrease further.“This would take off another percentage point from the coverage of the average scheme,” he said.Van Ek was no more positive for the fourth quarter. “As things stand now, the official discount rate at October-end would still be 0.2 percentage points above the current market rate. If interest rates don’t drop any further, the average funding would decrease by another 3 percentage points during the following three months,” he pointed out.However, the actuary stressed that the outcome of his prediction would very much depend on the level of the interest rates, “which is quite volatile at the moment”.In part based on data of supervisor De Nederlandsche Bank (DNB), Mercer concluded that the average pension fund closed September with a funding ratio of 109%.However, the €334bn civil service scheme ABP and the metal schemes PMT and PME already reported a funding shortfall, with coverage ratios of 103.1%, 102.8% and 102.6% respectively at September-end.According to Van Ek, many pension funds have not been able to fully compensate for the losses incurred at the start of the financial crisis in 2008.Pensions advisor Aon Hewitt said it is expecting a funding drop of 3.5 percentage points for the average pension fund during October.As the consultant estimated the funding of the average scheme at September-end at 108%, this would lead to a drop to 104.5%, the minimum required coverage.Mike Pernot, actuary at Aon Hewitt, said the coverage ratio already dropped by 2.2 percentage points during the past two weeks.He noted that this decrease would even have been 4.7 percentage points under the new UFR rules that come into force on 1 January 2015.Had the new UFR already been applied at the end of September, the funding of the average scheme would have been no more than 103.8%, and would have been 99.1% at the moment, according to Pernot. Dutch pension funds must expect a further drop of their coverage ratio over the course of October, consultants Mercer and Aon Hewitt have warned. Dennis van Ek, actuary at Mercer, is forecasting this month will see a drop of 3 percentage points for the average pension fund, in part following the continuing decrease of interest rates – the criterion for discounting liabilities.He noted that the 30-year swap rate had gone from 1.91% to 1.95% during the first half of the month.“Although the increased value of bonds and the rise of liabilities following the rates’ drop are reasonably balanced, equity markets have also fallen in October, with the MSCI World Index and the MSCI Europe losing 7% and 9% respectively,” he said.last_img read more

  • Approval delay throws up questions over Dutch ‘general’ pension fund

    first_imgQuestion marks have appeared over the law covering ‘general’ pension funds, or APFs, in the Netherlands after Unilever’s schemes said regulatory approval to convert to the new vehicle had been delayed.Speaking at a recent Euroforum conference, Rob Kragten, director of both schemes, said Dutch legislation had seemingly failed to account for company pension funds wanting to convert into APFs.Unilever has a closed, €4.8bn, defined benefit scheme called Progress and a new collective defined contribution pension fund called Forward; it is looking to bring the schemes together into an APF solely for the company.It is the first company in the Netherlands to have applied for an APF license. The new vehicle is designed to serve as a low-cost alternative for smaller pension funds considering liquidation but wishing to preserve their identity.It allows for different pension plans to operate under a single, independent board, with individual schemes’ assets ring-fenced.To date, take-up has been almost exclusively the preserve of insurers, with Aegon, Delta Lloyd, ASR, NN and Achmea having established their own general pension funds.Recently, Aegon received the first licence for an APF to be run by its subsidiary TKP, while PGGM – asset manager for the €172bn healthcare scheme PFZW – is the only pensions provider to have set up an APF.Kragten said Unilever’s chief motive in launching the APF had been to streamline board structure, as Unilever’s two pension funds already co-operate on asset management and pensions administration.He suggested that APF legislation, however, had failed to account for company schemes converting into general pension funds.“The regulator’s inquiries often address the business model and price setting, but these subjects hardly apply to our case,” he said.Kragten took pains to emphasise that slow progress on regulatory approval had not been due to any objections by the watchdog but rather the uniqueness of the application.For example, an integrity analysis – already completed – had to be repeated, as only later had it become clear that the criteria for banks and insurers had to be applied.Kragten said Unilever had aimed to have the APF up and running by 1 July, and that he had had to invest much time and effort in the process for “relatively little result”.last_img read more

  • PGGM: ECB’s policy could cause Dutch pension system ‘implosion’

    first_imgPGGM’s Agnes Joseph, expert in balanced risk management, and Niels Kortleve, innovation manager, explain how the European Central Bank’s policies are affecting Dutch pension funds, and the options for fixing the problems it has created.The European Central Bank’s (ECB) unconventional monetary policy is weighing heavily on Dutch pension funds. If the central bank’s low interest rate policy continues, many Dutch pension funds will need to cut benefits over the next three years, and pension contributions will rise. The total damage could be more than €60bn in the Netherlands.“Over the next three years, the Dutch pension system may implode if the interest rate stays this low.”There are ways to prevent this: unwind the quantitative easing (QE) policy such that interest rates may rise again; change the regulatory discount rates used by Dutch pension funds; or structurally reform the Dutch pension system. Source: ECBHow the ECB’s balance sheet has expanded, 1999-2016Several solutions to this problem have been posed over the last few months in the Netherlands:A first way out would be unwinding the ECB’s QE policy, after which interest rates would potentially rise again. It is up to the ECB to decide on the unwinding, but at the same time, it should recognise the negative impact on pensions and other savings, and should consider this when preparing an exit strategy.A second option is to smooth the impact of the distortion by adjusting the discount rate used in pension regulation. Dutch society regularly questions this discount rate. An alternative could be to adjust other steering mechanisms, for example lengthen the recovery period for pension funds.On 9 March, the political party 50Plus issued draft legislation to adjust the discount rate for pension liabilities for as long as the ECB policy is distorting interest rates, with a maximum of 5 years. By discounting the liabilities at 2% instead of the current market rate, the funding ratio of pension funds would rise substantially, lowering the negative impact of QE.A third way is to structurally reform the Dutch pension system. The ‘guaranteed’ benefits could be replaced by variable pension benefits, and the discount rate could be adjusted accordingly. The pension reform is being discussed by Dutch employers and unions at the moment.In the Netherlands, the pension sector recognises the challenges of the current low interest rate environment. It is not just QE, but QE does put extra pressure on the system and the need to act quickly. The Netherlands has €1.3trn in pension assets – 168% of the country’s economic output. Around 94% of these assets belong to defined benefit (DB) schemes. The pension benefits are ‘guaranteed’, in the sense that benefit cuts are only allowed as a measure of last resort.Since the benefits are ‘guaranteed’, the Dutch pension regulations require pension funds to use the risk-free interest rate as the discount factor for their liabilities. This makes Dutch pension funds very sensitive to changes to interest rates.In the past few decades, interest rates declined due to falling inflation (and falling inflation expectations) and potential growth, and due to changes in the age structure of the population. Declining interest rates have lowered the funding ratios of pension funds. Due to these lower funding ratios, retirement benefits have not been adjusted for inflation for many years now and in some cases benefits have even been decreased. At the same time, pension contributions have increased.In 2015, the ECB announced an expanded asset purchase programme, known as QE. It was aimed at fulfilling the ECB’s price stability mandate. QE lowered interest rates further. The exact impact of QE on interest rates is hard to determine, but the ECB estimated that the impact on the 10-year interest rate was a decrease of around 47 basis points (bps). “The longer QE stays, and the longer interest rates stay low, the more harmful it will be to pension savers.”The impact of this decline on Dutch pension savers and sponsors is enormous. The value of the liabilities has risen by roughly €100bn. Assets have also risen – due to higher bond prices and interest rate hedges – but by around €40bn. So pension savers and sponsors need to make up for approximately €60bn if interest rates stay low due to QE. Contributions could rise by 20%.Thanks to smoothing mechanisms within Dutch pension regulations, the effect of the 47bps decline in interest rates on pension savers has not been immediate. The smoothing mechanisms are there to avoid day-to-day random fluctuations due to short-term market volatility. Pension funds are by their nature long-term investors due to the long duration of their liabilities, and should not be faced with the effects of short term incidents like QE.But QE is no longer a short term matter. The longer it stays, and the longer interest rates stay low, the more harmful it will be to pension savers.Over the next three years, the Dutch pension system may implode if the interest rate stays this low. This is due to a (short-term) recovery period of five years, ending in 2020, which could mean benefit cuts if schemes do not meet minimum capital requirements by then. Contributions are also set for a maximum of 5 years, ending in 2020 for many pension funds. This implies a rise in contributions or lowering of benefits in the next few years.On 13 February 2017, the Dutch parliament discussed the ECB’s policy and its effect on pension funds. Politicians said that European policy makers should be aware of the impact of their policy on pension savers in Europe – persistently low interest rates slowly poison the European pension system.The Dutch Parliament and government can see the major impact of QE on pension funds, but they also respect the independence of the ECB. #*#*Show Fullscreen*#*#last_img read more

  • German election: Merkel’s coalition partners could shape EU relations

    first_imgAngela Merkel looks set for a fourth term as German chancellor in Sunday’s election, according to commentators, but question marks hang over which parties will make up the likely coalition and the subsequent implications for Franco-German plans for the EU.Assuming no major surprises, one possibility is for Merkel’s CDU to form a “Jamaica” coalition with the FDP (the liberal democrats) and the Greens.In the FDP, however, the CDU would have a coalition partner with a vision for Europe different to its own and that of Martin Schulz, the chancellor candidate for the SPD, according to Fabien de la Gastine, fixed income fund manager at La Française. The SPD has been the CDU’s partner in a so-called “grand” coalition since 2013.Léon Cornelissen, chief economist at Robeco, said the FDP may prove to be the “dark horse”. “The party currently has no seats in the 598-seat Bundestag but has over 10% support in the polls, which means it may hold the keys to power,” he said.The FDP is a natural coalition partner for the CDU and a deal would be considered very business-friendly, Cornelissen added, but its “somewhat eurosceptic” stance on Europe could make a deal with French president Emmanuel Macron difficult.“A particularly strong showing for the FDP would unsettle markets for a while, as it would also force Merkel to be not that generous with France,” he said. Economists at Bank of America Merrill Lynch agreed that the FDP’s potential inclusion in the German government would have a significant impact on Germany’s ability to support Macron’s – and European Commission president Jean-Claude Juncker’s – desire for more EU integration.The bank’s analysts, meanwhile, noted that Merkel and Macron had previously spoken about harmonising corporate tax rates in Europe, and that such an initiative could take on greater importance if the US president delivers a sizeable corporate tax cut.“The US will effectively ‘piggy back’ much of Europe in lowering its tax rate,” they said. “In fact, Germany’s corporate tax rate will begin to look relatively high. Over time, if Europe sees a drift down in some corporate tax rates, then we believe it will be a helpful tailwind for credit spreads.”Much of the attention surrounding Germany’s election will be on the anti-immigrant, anti-euro AfD party. A poll today had it on course for 11% of votes, well above the 5% that is required to get a seat in the Bundestag. It would mark the first time a far-right party entered the German parliament since World War II.The main parties have ruled out partnering with the AfD, however.La Française’s de la Gastine said: “Without a strong negative surprise, consequences on German growth and financial markets should be limited. Over the longer term, a pro-Europe coalition could give a new momentum to the EU and strengthen the euro.”Nadège Dufossé, head of asset allocation at Candriam Investors Group, said the longer-term impact of the result “should be market-friendly”.“Unlike the polls in other major countries over the past 12 months, no major party is running a platform on exiting the EU, cutting the healthcare service or building a wall with its next-door (country) neighbour – in a nutshell, political risk should not rise as a result of the elections,” Dufossé said. “In the medium term, this is likely to prove supportive of European assets, including the euro.”last_img read more

  • NBIM chief warns of volatile stocks as oil fund boosts equities

    first_imgSource: CBOEVIX index closing price, October 2007 to October 2017Slyngstad said the GPFG recorded positive results in all asset classes so far this year, and singled out the return on equity investments as having been particularly strong.NBIM said the total return on investments was 0.1 percentage point higher than its benchmark index.The manager has been shifting the fund’s assets towards equities and away from fixed income for some time. Earlier this year the Norwegian government increased the fund’s strategic equity allocation to 70%, from 62.5%.The GPFG’s equity investments returned 4.3% in the third quarter, while fixed income investments returned 0.8% and investments in unlisted real estate returned 2.7%.Despite inflows into the fund and the investment return generated, the market value of the fund decreased by NOK68bn.The krone’s appreciation against major currencies was to blame: NBIM reported that this factor alone had eaten into the value of the fund by NOK250bn.The fund received a quarterly inflow from Norway’s petroleum activities of NOK41bn, but these quarterly inflows had been gradually declining at least over the last 12 months, NBIM said.However, the size of the government’s withdrawals from the fund – which started in the first quarter of last year in order to supplement its budget – have also been steadily shrinking.In the third quarter of 2017, the Norwegian government withdrew NOK10bn from the fund. In the three-month period to the end of September, GPFG’s equities allocation rose by 0.8 percentage points from 65.1% – 12 months ago, it was 60.6%.The fund made an investment return of 3.2% in the July-to-September period, or NOK192bn.Yngve Slyngstad, NBIM’s chief executive, said: “We must be prepared for volatile stock markets, and cannot expect such a return every quarter.”His remarks echoed those of other leading asset owners in recent months who have attempted to manage future return expectations.Equity market volatility has declined to near-record lows in some areas, with the VIX – a measure of the volatility of the S&P 500 – hitting an all-time low earlier this year. The chief executive of Norway’s giant sovereign wealth fund has warned of higher volatility on the world’s stock markets, even as the fund has raised its equity allocation.Third-quarter data showed the Government Pension Fund Global (GPFG) had lifted its equities weighting to just shy of 66% at the end of September.Reporting results for the third quarter, Norges Bank Investment Management (NBIM) – which runs the Government Pension Fund Global (GPFG) – said the fund had a market value of NOK7.95trn (€836bn) at the end of September, of which 65.9% percent was invested in equities, 31.6% in fixed income and 2.5% in unlisted real estate.Since the end of the third quarter the portfolio’s value increased further. Combined with exchange rate movements, this has pushed the value of the fund above $1trn for the first time in its history.last_img read more

  • Dutch pension consolidators double market share to €9.8bn

    first_imgStapAegon€5.8bn46,000 The Netherlands’ five pension consolidator vehicles doubled their combined assets under management last year to €9.8bn.A survey by IPE’s Dutch sister publication Pensioen Pro has shown that the number of members in the general pension funds (APFs) has increased from 44,000 to 94,000 in total.Aegon’s APF Stap and ASR’s Het Nederlandse Pensioenfonds (Hnpf) in particular experienced rapid growth. The company pension funds of Douwe Egberts (€1.8bn) and Sanoma (€600m) joined Stap during 2018, and the Pensioenfonds Arcadis (€1.1bn) moved to Hnpf.The Centraal Beheer APF welcomed the €1bn company scheme of construction firm Ballast Nedam and the €165m pension fund of chemicals firm Cindu. The APFs attracted new employer business, as well as existing pension funds: Centraal Beheer said 548 employers joined last year, adding 13,000 participants.However, contrary to the previous year’s survey, none of the APFs were in a position to announce new commitments.Recently, the €1.1bn company scheme Randstad said that it had selected an APF, while the €1.5bn pension fund of automobile organisation ANWB also announced its intention to join a general pension fund. Source: Pensioen ProAPFParent company AUM Members  Total Meanwhile, in the UK, a survey by consultancy Hymans Robertson has found that only a quarter of trustees polled (25%) thought that transferring their pension scheme to one of the country’s two commercial consolidator vehicles would improve the security of pension benefits, reports Nick Reeve.The survey of 131 pension scheme trustees found that 35% hadn’t heard of The Pension SuperFund, while 60% hadn’t heard of Clara-Pensions. The two companies emerged last year as independent consolidators for private sector defined benefit (DB) pension schemes. The industry is currently waiting for the government to outline the legislative framework for the new vehicles, although The Pensions Regulator has set out its guidelines and expectations for schemes considering transfers.Alistair Russell-Smith, head of corporate DB at Hymans Robertson, said: “There is clearly a widespread lack of knowledge in the industry about the new players in the commercial consolidation market… [They] could benefit a significant minority of schemes, so it is vital the industry builds and grows its understanding about them. “Even if an employer has previously been reluctant to make significant upfront cash contributions, the ability to get a clean break from their DB scheme at a lower cost than buyout could now be the incentive that drives a significant cash contribution today.“Trustees concerned about the long-term covenant support should also seriously consider this option if the cash is now available. Without fully understanding the options available there is a chance that trustees could miss an opportunity to improve member security.” het Nederlandse PensioenfondsASR€1.4bn14,100 Centraal BeheerAchmea€1.3bn25,000 VoloPGGM€325m3,000 De NationaleNN Group€960m5,900 €9.8bn94,000 The APFs indicated that they were upbeat about their prospects for 2019, with Arnout Korteweg, executive trustee at De Nationale APF, saying that his scheme had received approximately 30 information requests last year.The interested schemes included pension funds with assets exceeding €2bn, he added.Hnpf indicated that an increasing number of larger pension funds were assessing the option of joining an APF.Centraal Beheer APF also reported “many” requests for information and proposals, adding that it expected to announce new entrants soon.However, Korteweg said several pension funds were reluctant to commit themselves because of uncertainty about the future shape of the Dutch pensions system. In addition, consulting their many stakeholders was delaying the decision process.Consolidators ‘yet to reach scale’According to Gerard Frankema, director of Stap, his APF was not operating under cost-covering conditions yet, explaining that the setup of the organisation was based on growth of the number of collective compartments for pension funds.De Nationale’s Korteweg said that up to €5bn of additional assets was needed to reach the APF’s break-even point.The €1.4bn Hnpf indicated that it would need assets under management of up to €7bn in order to cover its costs, while Centraal Beheer could not provide clarity on the issue.Meanwhile, the liquidation of PGGM’s Volo seems to be a matter of time, following the pension provider’s announcement last year that it wanted to discontinue its APF.Currently, Volo has the pension funds for Ortec and Jan Huysman as clients.Eric Goris, Volo’s chairman, said that it was assessing options for transferring its clients to another provider and subsequently liquidating the vehicle.Growth of APFs’ asset base (€m)Chart MakerUK: Trustees lack awareness of new consolidatorslast_img read more

  • Cypriot pension chief raises concerns over €20m state investment fund

    first_imgThe chief executive of Cyprus’ largest pension fund has expressed concerns about a new state investment fund planned for launch by the government with an initial capital of €20m.The fund is aimed at boosting the economy by supporting start-ups and business innovation, but Marinos Gialeli, chief executive of the €222m Cyprus Hotel Employees Provident Fund, has highlighted the need for greater protections for small investors.Gialeli told IPE: “We are a little bit concerned about the minority shareholders rights in Cyprus, plus that the court legal decision can take many years.“In addition, we would like to see the selection of the manager being done through global professional consultants via a public offering and not from the Cyprus Ministry of Finance.” Gialeli said his pension fund had no intention of investing in the government fund. This is because the majority of Cyprus Hotel’s portfolio is invested internationally, and mostly focuses on private equity.Local news service Stockwatch reported that Cyprus’ cabinet decided on the launch of the investment fund on Wednesday.Government spokesman Prodromos Prodromou said the aim of the fund was to foster business innovation and creativity, adding that it would provide an alternative funding source to the banking sector, according to the report.Prodromou said the state would not participate in the decision making of the fund, which would operate purely in accordance with business standards.last_img read more

  • ​Sweden eases IORP II rules for COVID-hit pension funds

    first_imgThe Swedish Finance Ministry has now granted the urgent plea from the country’s financial supervisory authority Finansinspektionen (FI) for pension funds to have special solvency leeway in their IORP II applications, given the impact of the COVID-19 outbreak on balance sheets.The ministry released a proposal this morning for a new piece of legislation allowing funds to goa ahead with their conversions to the special status of occupational pension company (tjänstepensionsföretag) under Sweden’s domestic implementation of the EU directive – even if they fail to meet the solvency criteria at the time their conversion happens.Publishing the bill, the ministry said the proposed transitional provision it was putting forward meant the requirements for occupational pension funds (tjänstepensionskassa) to be allowed to run occupational pension business as occupational pension companies) were being eased.“The purpose of the transitional provision is that an occupational pension fund should not be denied permission to operate as an occupational pension company due to temporary failure to meet the risk-sensitive capital requirement caused by the prevailing market situation,” it said. The ministry said the bill contained proposals for the kind of transitional provision that FI had requested.At the end of May, FI wrote to the ministry asking for transitional provisions to be added to the law implementing the EU’s IORP II directive, warning that some of the funds could even end up in liquidation without these, because the pandemic’s effects on markets might make them fail capital requirements.The new piece of legislation put forward today is scheduled to come into force on 15 December 2020.On 15 June, media sector pension fund PP Pension announced it had become the first institution to be granted permission from FI to carry out occupational pension activities as of 1 July 2020 in accordance with the new rules, which came into force in December 2019.Others that have applied include Sparinstitutens Pensionskassa (SPK), Kåpan and Svenska Kyrkans Pensionskassa.Looking for IPE’s latest magazine? Read the digital edition here.last_img read more

  • Alecta moves Silberg up to head new governance and sustainability team

    first_imgCarina Silberg, Alecta“The new group will, among other things, develop its work as a support function for the equity, fixed income and real estate units within our asset management,” he said.Silberg said that as well as contributing to making ESG matters more firmly a part of Alecta’s asset management, the new team would help bring about a closer dialogue with the companies the fund owned stakes in, in order to be clearer about what Alecta expected of them. Brufer, who has been in charge of Alecta’s corporate governance work since 1997, is retiring in the course of 2021, the fund said.In the run up to his departure, Alecta said Brufer would continue to be in charge of corporate governance, and would support Silberg in building up new group. Alecta, the biggest pension fund in Sweden, is creating a new, united corporate governance and sustainability team within its asset management operation after the board decided to ramp up the pension fund’s work in this area, it has announced.The organisational change dovetails with the upcoming retirement of Ramsay Brufer, the SEK963bn (€93bn) pension fund’s head of corporate governance for nearly a quarter of a century.Carina Silberg, who has been head of sustainability at Alecta since 2017, is being promoted to lead the new group, taking the title of head of corporate governance and sustainability.Announcing the re-organisation, which will take effect this coming Tuesday, Alecta said: “Alecta’s board has decided that more focus should be given to the development of corporate governance and sustainability work.” The aim of this was to improve conditions for the continuing generation of good long-term returns for customers, the Stockholm-based pension fund said.Hans Sterte, head of asset management at Alecta, said the pension fund – which is the default provider for traditional insurance within the supplementary private-sector occupational pension system (ITP) – needed to integrate ESG issues fully into active management.last_img read more