Thursday, October 08, 2009
Friday, September 18, 2009
Linking pensions to longevity
For some undisclosed reason, Switzerland is virtually omitted from the scope of the analysis, even though there clearly is no linkage between longevity risk and pensions whatsoever. In the Swiss three pillar system, longevity risk is borne in the first pillar by the tax payer, by employers in the second, and by individuals in the third pillar.
Thursday, September 03, 2009
Thursday, June 18, 2009
A busy week of acronyms
Monday, June 15, 2009
Impact of accounting and prudential regulation on pensions
"A long-term view involves short-term risk, whereas a short-sighted strategy involves increased risk over the long term."
- There seem to be a few at least implicit factual inaccuracies in the parts describing the regulatory environment. The most glaring of which may be the assumption that the EU pensions directive is applicable in Switzerland - it is not.
- Accounting standards seem to be understood to effectively determine investment action. While it is not unheard of that managements structure transactions in such ways as to optimise their reporting, this clearly goes one step too far. We are well aware of the interdependence between perception (qua accounting standards) and (economic) reality, but at least in an academic report, the latter needs to retain some vestige of predominance over the former. Remember: pension funds' long-term time horizon, as accounting standards can and do change.
Tuesday, May 26, 2009
Longevity in Switzerland
Wednesday, May 13, 2009
Accounting standards - pass or fail?
Tuesday, May 05, 2009
XBRL - A Guide for Investors
Also on the XBRL channel: Yesterday, L'Agefi published an article I've written. But when you follow the link, you'll see that it is written in excellent French, which cannot be me. Thanks for the contact and the translation goes to Marc Barbezat, member of XBRL CH!
Wednesday, April 22, 2009
New online resources
Sunday, January 11, 2009
Victims (III): Prudent Person in Switzerland?
Saturday, December 27, 2008
Wednesday, October 22, 2008
XBRL for Investment Professionals
Wednesday, July 23, 2008
Swiss management of longevity
Wednesday, January 02, 2008
The future of public pensions
Tuesday, December 11, 2007
IZS conference documentation
Sunday, October 14, 2007
Revised SWX Corporate Governance
Sunday, September 16, 2007
Valuation of Swiss IORPs
Now, this is not exactly news as IAS 19 is hardly known to reflect economic reality thanks to its built-in shortcomings. But the instances listed do not even appear to be related to IAS 19 features to start with, but rather to what needs to be considered as accounting artefacts in the light of (legal) reality. One wonders how such numbers can be presented as true and fair?
Wednesday, September 12, 2007
Swiss CFA supports XBRL
Sunday, September 09, 2007
Occupational pensions in Switzerland
These statistics have several deficiencies. Available numbers are not timely. Furthermore, we know little about the effective structure of overall liabilities, nor about interest rate sensitivities of assets.
Friday, August 03, 2007
CFA Pension Code of Conduct
Thursday, July 12, 2007
UK pensions to become mandatory?
The new Pensions Bill will ensure that for the first time not just some but all working people have the right to a workplace pension with a duty on every employer to contribute towards it.
We can only interpret this to mean that occupational pensions will go from contingent to mandatory for everyone in the UK. The implications of this change for the European first and second pillar classification, which critically relies on the non-mandatory nature of occupational pensions in contradistinction to social security, may be huge. This criterion, which is dispensable in our view, would be a major technical impediment to the eventual application of the Pensions Directive to Switzerland with its mandatory occupational pensions system.
Wednesday, June 20, 2007
Education & Innovation
Friday, May 18, 2007
"Prudent investor" for Switzerland?
Unfortunately, detailed results of the survey appear not to be available online.
Saturday, May 12, 2007
Opening up Switzerland
Friday, April 13, 2007
Draft Swiss pension law
At the same time, ASIP has published the executive summary of a research paper examining the alleged over-capitalisation of the Swiss second pillar with a view to reducing the full coverage requirement. Some of the arguments proffered are truly surprising: foreign investments are used as evidence of an over-abundance of capital. Unsurprisingly, the authors conclude that there is no indication for too much saving and that it is reasonable to maintain the full coverage requirement.
Wednesday, April 11, 2007
2007 asset allocation survey
Saturday, March 31, 2007
Europe in a nutshell?
Tuesday, March 13, 2007
Global institutional investors
Two side notes on Swiss pension funds: Available information about their assets & allocation is two years older than other countries', and their equity exposure is considerably below average.
Monday, March 12, 2007
The chocolate connection
The OFP seems to be a highly attractive entity to provide pan-European pensions with. It operates on zero (income, capital, VAT) tax, it can provide solidarity across several pension plans (which is attractive for efficient capital allocation), it reflects no other restrictions on asset management than the Directive's prudent person principle, it may rely on Belgium's extensive network of double taxation treaties, it takes advantages of Belgium's recent transition to EET, it is not encumbered by a Pensions Protection Fund levy and last, but by no means least, the valuation of its liabilities may be based on a discount rate that incorporates expected returns, thus may go as high as 6%. A word of caution may be in order here, though: It is not clear whether the long term consensus expected return used to derive that attractive discount rate takes into consideration recent literature on the proper calculation of expected rates of return.
Jean-Pierre Steiner of Nestl� Capital Advisers shed some cold water on participants' hopes that pan-European pension plans might fully replace local plans in the near future. In his view, this is an ambitious long-term objective reaching beyond his active lifetime. Nevertheless, he put Nestl�'s considerable weight behind the support of Belgium as the currently most attractive location for pan-European pension funds.
Also of interest was Mr Van Hulle, the EU Commission's representative's comment that he wasn't opposed to supervisory shopping, which is of course tantamount to regulatory shopping - something that tends to be frowned upon elsewhere. Equally interesting to Swiss listeners was Mr Wymeersch's note that Belgian first pillar institutions may be falling under the Directive, which seems to be in direct contradiction to the Directive's scope and is of particular interest to Liechtenstein as well.
Saturday, February 03, 2007
M&A Yearbook Switzerland
Wednesday, December 20, 2006
Sunday, December 17, 2006
Seminar documentation available
Wednesday, November 22, 2006
Asset management under the Directive [CH]
Wednesday, November 15, 2006
One European retirement market [CH]
Friday, November 10, 2006
Taboo topic retirement age [CH]
Sunday, October 08, 2006
European Pensions from a Swiss perspective
Monday, September 04, 2006
Dynamic investment strategies [CH]
Materially, the study assesses alternatives to the current common practice of buy and hold strategies. There is quite enough material for disagreement not to have to take recourse to marginal political squabbles. My main points of critique are the following:
P.S. The authors comment offline that they assumed a constant technical interest rate and a closed fund. Unfortunately the assumption about the technical rate was tacit.
Thursday, August 24, 2006
Demographic leporello [CH]
Tuesday, August 08, 2006
No Prudent Investors in Switzerland? [CH]
Incidentally, the Prudent Investor is not only advocated by Messrs. Skaanes & Hauser in conjunction with the IMF, but also by the Pensions Directive, of course.
Sunday, July 02, 2006
Europe Report 2006 [CH]
The Report mentions the Pensions Directive in several instances as a business opportunity not currently available to Swiss providers, or as a substantive vector for change in the non-mandatory segment of the second pillar in case it became applicable. In other parts of the report, the Directive is seen as related to a possible future Services Agreement, the negotiation of which has been adjourned in 2003. This policy stance evidently is detrimental to the interests of the Swiss pensions industry and therefore requires adjustments in several respects.
Tuesday, June 27, 2006
Pan-European Pensions in Z�rich [CH]
Wednesday, June 21, 2006
IZS Seminar on Pensions Directive
Tuesday, June 20, 2006
IMF proposes reform to Swiss pensions system [CH]
While the analysis inevitably remains at a high level of abstraction (for instance, there is no mention of the fact that many pension plans that are nominally classified as DC need to be reclassified as DB to stay in line with IAS 19), the international comparison permits important conclusions concerning the fragmented supervisory structure in Switzerland and its outdated regulatory framework with a set of parameters that are defined without much recourse to actual market developments.
It will interesting to follow the IMF's more detailed exploration of these issues, announced for the Financial Sector Assessment Program update scheduled for the end of this year!
Monday, May 29, 2006
IMF on Swiss pensions supervision [CH]
More importantly, they will look further into several second pillar issues, namely -
From an international practitioner's standpoint, these are all valid issues that deserve close examination. Regulatory arbitrage is a fact, as is the lack of a fair value based approach to funding issues.
Thursday, May 18, 2006
EFRP view of Switzerland
Sunday, May 07, 2006
Interactive financial data in Switzerland
Friday, April 28, 2006
Supervisory cooperation EU/CH
From a pensions viewpoint, there are two relevant aspects: 1) The MoM might serve as a blueprint for cooperation in the pensions arena. This presupposes however that there is 2) a supervisory body of Swiss IORPs which is capable of filling the same r�le. Currently, it is questionable whether that r�le might be filled by the FSIO, which does not act as a direct supervisor to IORPs. We note however that, generally speaking, insurers seem to be well ahead of the "pensions pack" with regards to European market access. Their specific advantage with regards to market access to the new pan-european pensions market seems to be limited, though, since Appendix 2 of the Insurance Agreement appears to exlude such business lines from the scope of the Agreement.
Meanwhile, I've joined IZS's project group on Pan-European Pensions, which has held a very productive meeting yesterday. An in-depth public information event on the subject matter is probably forthcoming shortly.
Tuesday, April 25, 2006
Second pillar without frontiers
Thursday, April 20, 2006
European Pensions for Switzerland
The Pensions Directive is technically still not part of the legal body of the EEA at this point. This technicality is expected to be removed by May of this year, however. Nevertheless, the Principality of Liechtenstein, with which Switzerland has close ties, is part of the EEA and plans to transpose the Directive into its law by 1 January 2007. We are keeping a close watch on what is happening in the neighbourhood.