QC • Partners (20.10.21): #Volatility – Der Anlage-Podcast (mit der Börsen-Zeitung): Episode 44 – Schieflage im Reich der Mitte…
Peter Hansson,CEO des Sparinstitutens Pensionskassa SPK (vergleichbar mit dem BVV) in Stockholm und Chairman des schwedischen Pensionsfondsverbandes Tjänstepensionsförbundet, spricht mit Leiter-bAV.de über Dinge, welche die deutsche und die schwedische bAV gleichermaßen berühren: Niedrigzins und europäische Regulierung.
Mr. Hansson, how do you evaluate the announcement of EU-Commissioner Michel Barnier not to introduce a risk-based capital requirement regime in the first pillar of the new IORP-directive? And what is the perspective here now?
Generally the problem is that we do not know. The QIS-results show that differences in how individual countries have set up their occupational pension systems are wide. It depends on many things outside of the IORP-directive such as local agreements between organizations of employers and employees, taxes, state pensions systems, history… For that reason we do not know how the Pillar I will be set up, and its too early to tell the impact. Anyway, it will be hard to have one system that fits all. If that’s still the intention then there needs to be a deeper understanding of the impact and the value for the beneficiaries before design and implementation. Many of the IORPs are quite small and purpose built to generate maximum efficiency to their members. Why should the beneficiaries in an IORP accept reduced efficiency for a one size fits all system?
Due to national legislation, Swedish IORPs are faced with high volatile mark-to-market accounting anyway?
In Sweden we have a legal requirement in DB-setups to have a fully funded situation. The Swedish Financial Supervisory Authority – the „Finansinspektionen“ – has a stress test, a trafficlight system that continuously checks the funding status. The mark-to-market requirement was introduced 2006 and I guess these two points are the reasons why Swedish IORPs come out well in the QIS. The discount curve in the valuation has been highly volatile due the market volatility, the small Swedish bond market and due to the fact that Sweden has been a safe haven for bond investors globally. These artificial volatility became a problem when insurers and IORPs had to buy more and more bonds and swaps. With the fundamentally well funded situation, volatility hurts Swedish IORPs more than the funding level. Last year, the Finansinspektionen introduced a floor for the discount curve to be in force until we get a new curve end of 2013. The new curve will be a Solvency II type of macro curve. Full details yet to be published, but preliminary internal findings the volatility will be reduced by 50 percent for an IORP like SPK.
Next steps are now the pillars II and III of the new IORP-directive. What do you expect or fear here? And what is the position of the Swedish government?
We are positive to give added value to the beneficiaries. Pensions are the future income for many people and must have a secure way of delivering expected values to low costs. The risk is once again that a one size fits all reporting system will add all individual local government requirements to a “Monster Reporting System” that only reduces the efficiency for the members of the IORPs. The Swedish government has not been outspoken with a position on the matter yet.
What is the Swedish position concerning the new mobility directive? In Germany, the industry is concerned about a further reduction of the vesting periods. But this is not a topic in Sweden?
For us, providers of pensions that are based on collective agreements, it is discussed on a general basis. Independent providers on pensions see a market. Generally many are in favour of mobility, but it has to be fair to the ones who exit and to the ones that remains in the current provider.
Gabriel Bernardino hast just delivered a speech in Stockholm. Do you think that the claim of EIOPA to regulate the European pensions has the trend to go to far?
EIOPA has a tough job to do. But there is a risk for overregulation. And maybe overambition. When talking to my colleagues in Europe most of them have a good working relationship with the country’s FSA. A one size fits all is might have a high regulatory value, but there needs to be active transparency from the regulator on how suggested regulations, that are going to be costly, are in the interest of the pensioners. European top governing bodies have to take this in to account when giving instructions to EIOPA.
German IORPs with their quite defensive Asset Allocation are suffering form the low-interest-phase. But after all, Swedish pension funds have to meet their liabilities and keep their funding levels, too. You are focused on two asset classes only: Equities and Swedish Bonds.
Yes, in the case of SPK it is two asset classes that relates to a keep-it-simple-stupid strategy. Well, it’s actually three asset classes on the top level: Swedish equity with 10 per cent, Global equity with 20 and Swedish fixed income with 70 per cent. And our external managers strategy is that managers are given wide mandates so they can act more efficiently. If they are good, they must have an extensive toolbox. We diversify managers and actively exchange them if needed. We handle risk management and internal reporting internally with the award winning R-MAP: A long term investment strategy combined with management of short term risks that consists of a management action plan, a colour coded risk matrix (the R-MAP navigation tool) and a daily risk report (the R-MAP daily positioning tool). And our manager selection and strategy are also handled internally and close to our heart. In the “new world” with the new discount curve and reduced volatility combined with the ultra long bond rate have been falling for 20 years, we will reconfigure our strategy for 2014. This includes adding many new asset classes, but it is still going to be a highly efficient keep-it-simple-stupid strategy.
What do you think about the future of the Euro? Is the crises your reason not to invest in Euro- and USD-FX, but in Swedish bonds only? And do you hedge the currency risk?
With our long term view I am generally positive to Europe. We are invested in equities globally. Here we have a simple dynamic FX overlay. On average 50 per cent hedged, but that varies depending on strength and weaknesses of the Swedish Krona. For bonds it is the volatility in mark-to-market of liabilities that is the problem. Our liabilities have a duration of 26 years and are marked to Swedish yield curves. The Swedish bond market is not liquid enough for practical hedging on these long durations, so we have looked at investing globally. But the high volatility between Swedish and US/EURO yields and the low levels of returns talk against that.
Result is that your Asset Allocation consists of 70 per cent Swedish bonds. Is their return enough to meet your liabilities?
So far yes.
Das Gespräch führte Pascal Bazzazi.