Pension Pulse

Elizabeth Pfeuti of Financial News reports, Dutch pension fund giant loses CEO : One of the largest pension funds in Europe is to lose its chief executive, in the latest high-profile resignation to hit the sector. Else Bos, who has led PGGM since 2012, is to quit the organisation in November. PGGM invests €205.8bn for various pension funds, including the €188bn PFZW scheme for medical workers. PFZW is the second-biggest pension scheme in both the Netherlands and Europe . Earlier this month, APG, Europe's largest pension fund, announced that Eduard van Gelderen, its chief executive, will leave the organisation in August . Van Gelderen is to take a senior investment role at the University of California's $100bn investment fund. In a statement published by PGGM, Bos said: “I have very much enjoyed working at PGGM over the past 15 years. An organisation of committed professionals with a green heart who are devoted to creating a valuable future for participants and m...

Szu PingChan of The Telegraph reports, Pensions are sitting on a global time bomb, warns WEF : The world’s biggest economies are sitting on a $70 trillion (£54 trillion) pensions time bomb that will balloon to more than $400 trillion within four decades unless policymakers take urgent action, the World Economic Forum has warned. Analysis by the WEF showed the six countries with biggest pensions – the US, UK, Japan, Netherlands, Canada and Australia – as well as China and India – the two most populous countries in the world – faced a retirement savings gap of $428 trillion in 2050, up from $67 trillion in 2015 (click on image). This is based on the Organisation for Economic Co-operation and Development’s (OECD’s) recommendation that savers should aim for a retirement income of 70pc of earnings when they stop working . The gap is expected to grow to the equivalent of $300,000 per person by 2050, adjusted for wage inflation, which is larger than the size of the global econo...

A month ago, Adam Ashton of the Sacramento Bee reported, Unions kill bill to cut cost-of-living increases for CalPERS pensions : Public employee unions presented a united front on Monday against a bill by Sen. John Moorlach that aimed to close California’s pension funding gap by eliminating cost-of-living increases and asking local governments to chip in a greater share of their revenue toward retirements. Moorlach, R-Costa Mesa, shaped his Senate Bill 32 using the language of climate change laws the Legislature adopted to set goals for the reduction of greenhouse gasses. Last year’s SB 32, for instance, sought to cut greenhouse gas emissions to 40 percent below 1990 levels between now and 2030. Moorlach’s pension bill similarly would demand that CalPERS and CalSTRS reduce their unfunded liability to 1980 levels by 2030. Today, both pension systems have about 64 percent of the assets they’d need to pay all of the benefits they owe. Read more here: http://www.sacbee.com/new...

Edward Siedle wrote a comment for Forbes, How To Steal A Lot of Money From CalPERS, The Nation's Largest Public Pension : How hard would it be to steal millions from CalPERS, the nation’s largest public pension with $320 billion in assets? Easy-peasy. Yesterday the Wall Street Journal reported a disturbing fact—a fact well known to pension insiders for years. That is, officials at CalPERS do not know the full extent of the fees the pension’s private equity managers take out of the pension. At a 2015 meeting, the chief operating investment officer openly acknowledged that no one knew the performance fees paid. Let’s clarify what’s going on here. Presumably the mega-pension knows, or can readily establish, all the fees—asset-based and performance—it pays its money managers pursuant to fee invoices. (A breakdown of other operational fees—which can be significant—can either be gleaned from investment fund financial statements or specifically requested from managers.) What...