Global Pension Wrap: June 8 edition
A round-up of the pensions and investment news stories developing around the world this week, from trouble brewing in the Netherlands' pensions paradise to an investment row going all the way to the US Supreme Court.
Supreme Court to scrutinise IBM pension case
Fundfire: Managers of a retirement plan for IBM are being taken all the way to the US Supreme Court over claims they failed to disclose that the shares the fund held in one of its sponsor's struggling divisions were overvalued. Plaintiffs allege that pension managers knew the IBM chip-making unit, valued at $2bn (£1.6bn), was losing money before it was sold to GlobalFoundries Inc. for $1.5bn. The test case could affect thousands of retirement plans in the US, where it is common for funds to own stakes in their sponsoring employer.
Australia's Prime Super axes admin fees on low balances
Ignites Asia: An Australian superannuation fund has take the step of removing administration fees for savers with the smallest pots, insuring them against continual erosion by charges. The A$5bn (£2.7bn) Prime Super will provide admin for free to any customers with less than A$6,000 in their account, according to Financial Standard. The move coincides with a new act from the Australian government, which bans exit fees and limits total charges to 3 per cent for people with small pots.
Brazil's Congress confident pension reform will pass
FT: Support has been declared for pension reform proposals made by Brazilian president Jair Bolsonaro by the presidents of both of the country's houses of Congress, despite a lack of popularity with the general public. Mr Bolsonaro hopes to raise retirement ages in a bid to rectify the nation's parlous finances – public debt is forecast to reach 90 per cent of gross domestic product this year, while the economy shrank over the first quarter. Despite the two prominent supporters critics remain, and analysts now expect public savings to be watered down from R$1tn to R$700m.
Finnish pension insurer scrutinises costs in passive ESG funds
Mandatewire: A Finnish provider of pension insurance has hit out at the unreasonable costs of passive funds incorporating environmental, social and governance concerns, asking asset managers to return to the drawing board and rethink costs. The €47.4bn (£40.9bn) Ilmarinen says offers of exchange-traded funds either failed to deliver the sustainability criteria it was looking for or raised prices too much for this extra analysis. Three managers have since risen to the challenge and the insurer has acted as an anchor investor for fund launches with BlackRock, DWS Group and Lyxor Asset Management.
Clock ticks louder as Netherlands' pension crisis intensifies
FTfm: Strikes have engulfed the Netherlands' transport services this week in protest against pension reforms that will raise the state pension age to 67 by 2021. Trade unions in the country are campaigning for the retirement age to be frozen at 66, despite Dutch people enjoying some of the most generous pensions in the world across their state income and private wealth; gross pensions for workers almost match their earnings in employment, according to the OECD.
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