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Dutch funds count on investment returns to close funding gap

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first_imgThe funds are supposed to reach their minimum funding ratios in 12 years’ time. This period was extended from 10 years last year to save a number of funds, notably the metal industry schemes PMT and PME, from having to cut pensions.In their recovery plans, the pension funds have put all their cards on investment returns in an effort to avoid having to either cut pensions or increase contributions.“Most pension funds allow for the maximum expected annual return of 5.6% on equities in their recovery plans,” DNB noted.None of the funds account for higher pension contributions, the regulator added.Moreover, most funds’ current pension contributions are too low to even sustain the current low funding ratios, DNB noted. All the plans received by DNB were drawn up before the coronavirus crisis caused a hit to asset prices and sent interest rates even lower.Risky strategyIt’s a risky strategy for pension funds to bet on investment returns doing the job that has backfired in recent years. Many pension have had insufficient funding ratios since 2015, and have been doing exactly this ever since, with disappointing results.“The realised average recovery in funding ratios since 2015 has been only 1 percentage point by 2020, compared to an expected average of 19 percentage points according to their recovery plans,” DNB noted.The main reason for the failure of previous recovery plans was the strong drop in interest rates over the period.As most pension funds had only hedged part of their interest rate risk, they had to use their investment returns almost completely to compensate for an increase in the value of their liabilities.The struggle of most Dutch pension funds to maintain sufficient funding ratios in the current low-interest rate environment is the main reason behind the planned switch to DC arrangements.To read the digital edition of IPE’s latest magazine click here. The 150 Dutch pension funds that registered insufficient funding ratios at the end of 2019 all believe investment returns will suffice to close their funding gaps.None of the funds are planning to increase pension contributions to improve their financial position, pensions regulator De Nederlandsche Bank (DNB) said yesterday.All pension funds are currently required to make a recovery plan if their funding ratio is below the required minimum, which is based on the risk profile of their investment portfolio at the end of any given year.The 150 pension funds concerned were required to send their recovery plans to DNB by 1 April.last_img read more

Big East commissioner Marinatto, coaches tight-lipped about realignment plans

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first_imgNEWPORT, R.I. –– Following the conference realignment that took place in June, mum was the word Tuesday from Big East commissioner John Marinatto. There was no talk regarding the Big East’s approach to the future of major conference realignment and expansion. Published on August 3, 2010 at 12:00 pm Comments And Marinatto forcibly applied that same muzzle to all eight of his head football coaches concerning the issue Tuesday morning in Rhode Island prior to the conference’s annual Media Day. Pittsburgh was picked to win the conference in the preseason media poll. Syracuse was picked to finish seventh, one vote ahead of last place Louisville (41-40).AdvertisementThis is placeholder text‘Historically, as you know, we like to do things quietly behind the scenes,’ Marinatto said. ‘Everything is on the table. … Publicly, we don’t talk about it. But we are talking about everything from expansion to our own television network, to things that we need to do internally. … I similarly asked our head coaches to refrain from speculating on these matters.’Marinatto harped on the fact that in the aftermath of this summer’s conference shakedown, he would like for the Big East to stay ‘true to our values’ of not speculating on matters. In the wake of the reshaping of the Big Ten, Pac-10 and Big 12, Marinatto spoke very little concerning the ramifications for the Big East. But he did hint that he is doing everything he can to maintain the Big East’s status as one of the country’s top football conferences, even if he urged his coaches to not provide any specifics Tuesday.Marinatto said the Big East’s next main issue is capitalizing on its television contract, which is with ESPN for the next four years.  ‘We as a conference continue to monitor the landscape while focusing our time on positioning ourselves for optimum growth in the future,’ Marinatto said.During a question and answer session immediately after his press conference, Marinatto did revisit just what his and other conference commissioners’ mindsets were like during the shakedown in June. Nebraska joined the Big Ten on June 10. Colorado and Utah joined the Pac-10 on June 14 and 17, respectively. In a scare to the Big 12, Texas and Oklahoma, along with four other Big 12 schools, nearly headed to the Pac-10.They were scared but also prepared. Always prepared.Marinatto was fine with opening up about the past, not the future. But he promised that that future will be one in which Big East fans should have faith. He repeated three times that he feels the conference is stronger today than at any point in its history.‘In the 10-day period in June, we in the world of collegiate athletics all got extraordinarily weak,’ Marinatto, said. ‘…Most of us didn’t want to have that kind of a change, we didn’t think it was healthy for collegiate athletics as a group moving forward. So all of us in collegiate athletics that week kept in touch, maintained contact and were planning accordingly.’Marinatto again on Tuesday constantly brought up the fact that the conference is confident in its approach and strength moving forward, especially seeing that it hired former NFL commissioner Paul Tagliabue as an adviser this past spring. As the conference enters its 20th year in football play, Marinatto now feels he might have the most talented pawn of them all for the future of the major-conference shakedowns in Tagliabue.Speculation was a no-no for the entirety of those under the Big East football umbrella on Tuesday in Rhode Island. And Marinatto’s simple answer to why was because speculating is not like the Big East. Speculation can only lead to turmoil.You can save speculation for other conferences. Not his. ‘When you are sitting in a position of authority and you speculate, I don’t think that it serves anyone well,’ Marinatto said. ‘Because you create unfair expectations or an environment that is cultivated based on rumor and innuendo. I’ve asked our coaches not to speculate for that purpose, I don’t think it serves anybody really in a positive way.’Syracuse head coach Doug Marrone held up his half of Marinatto’s preached bargain on Tuesday. Marrone welcomed that conference-realignment muzzle. Just like the other seven coaches, as they all tip-toed around the possible conference-speculation landmines.Together. ‘I love this conference,’ Marrone said. ‘I played in the East. I am an Eastern football guy. I love it. I trust the people in the conference. They will do what is best for us.’[email protected] Big East Football Preseason Media PollRank     Team (first place votes)           Pts.1.           Pittsburgh (22)                        1902.           Cincinnati                                1423.          West Virginia (1)                      1424.          Connecticut (1)                         1315.          Rutgers                                      996.          South Florida                             797.          Syracuse                                    418.          Louisville                                  40 Facebook Twitter Google+last_img read more