UK government seeks to open up illiquid assets to DC funds

first_imgThe UK government has unveiled proposals aimed at increasing workplace defined contribution (DC) schemes’ investment in so-called illiquid assets, such as infrastructure.Less liquid assets such as small and medium-sized companies or housing were attractive from a diversification and returns perspective for schemes, and were also important sectors of the economy, according to the government.To get more DC schemes investing in these assets the Department for Work and Pensions (DWP) yesterday announced plans for a new way of accommodating performance fees – often associated with illiquid assets – within the 0.75% charge cap on default funds used by auto-enrolment pension schemes. It also proposed a measure aimed at encouraging consolidation, which would require some or all smaller DC schemes to evaluate every three years whether the scheme ought to be merged with a larger scheme and wound up. “Consolidation is taking place, but it could be accelerated,” wrote Guy Opperman, pensions and financial inclusion minister, in the foreword to the consultation.“It’s remarkable that pension schemes from Australia, Canada and elsewhere have bought into UK infrastructure assets, but I rarely note similar investments by UK schemes,” he added. DC evolution ‘milestone’Maria Nazarova-Doyle, head of DC investment consulting at JLT Employee Benefits, hailed the DWP’s consultation as “a very important milestone” in the evolution of DC schemes in the UK.“For too long, DC schemes have been focused on investing in daily dealt funds with 100% liquidity, while not diversifying their investments sufficiently and leaving additional returns that come from an illiquidity premium on the table,” she said.“Recognition that this short-term approach is dangerously misaligned with the long-term horizons of DC savers is now hitting the mainstream and this consultation will bring this issue into the forefront of discussions.”Others appeared to question the effectiveness of the government’s proposals. “If this is done properly, then it will benefit both pension savers and the wider economy”Jonathan Lipkin, the Investment Association“With the benefits of scale and the desire and capability to invest in a broader range of assets, I am confident that we can change that, and can begin to engage members more by showing how their contributions are being visibly put to work.”The DWP consultation also set out plans to require larger schemes to disclose their policy on investing in illiquid assets and to report annually a rough percentage allocation.The UK’s pension fund and asset management trade bodies welcomed the government’s plans but suggested the devil was in the detail.Jonathan Lipkin, director of policy, strategy and research at the Investment Association, said: “If this is done properly, then it will benefit both pension savers and the wider economy and we look forward to working with the government and regulators to deliver on that ambition.”Caroline Escott, investment and stewardship policy lead at the PLSA, said: “It’s important to ensure schemes and trustees retain the freedom to invest as they wish in the interests of their members, so any new rules must respect that freedom and not be overly prescriptive.” Mark Jaffray, Hymans RobertsonMark Jaffray, head of DC consulting at Hymans Robertson, said pricing of illiquid assets would need to improve so that DC schemes could allocate a meaningful amount – suggested as being more than 10%.In addition, investing in illiquid assets required more governance, and trustees and pension managers needed to be comfortable with the associated risks, he said.Steve Webb, former pensions minister and director of policy at Royal London, said the government would need to take a much tougher approach if it wanted to see bigger DC pension investors in the UK.“The government admits that large numbers of small pension schemes already fail to meet even basic rules and regulations about how they operate,” said Webb. “Giving them another duty to review their scale once every three years risks being no more than a feeble tick box exercise.”He also questioned the Pensions Regulator’s capacity for enforcing the mooted triennial assessment given it was “busy dealing with multi-billion pound deficits across the world of [defined benefit] pensions”.Last year, Mark Fawcett – chief investment officer at NEST, one of the UK’s biggest DC master trusts – urged infrastructure managers to raise their game in order to win DC mandates and assets.last_img read more

Oslo Set to Become Zero-Emission Port

first_imgMr. Ingvar M. Mathisen and Ms. Heidi Leander Neilson from Oslo PortBeing one of the leading maritime centers in the world, Norwegian Port of Oslo is looking to expand further, meeting at the same time its ambitious targets for reducing greenhouse gas (GHG) emissions.Clear targets are set for 2030, with an 85 percent reduction in current GHG emissions, and after that efforts will continue so that Oslo can become a zero-emission port in the long term.In order to reach its goal of a future zero-emission port, increased sea transport is an important contribution to this green shift. Over the past years, the Port of Oslo recorded a growth in its container volumes, leading to an all-time record in 2018 when the port handled a total of 238,000 TEUs. As the port is growing very rapidly, the port needs to make sure it doesn’t become a bottleneck in this development.With more lines and more vessels calling in Oslo, the port is going to the south, moving out of the city to expand further.Currently, the Port of Oslo is finalizing its Master Plan for the South Port, a new cargo port in Sydhavna, Ingvar M. Mathisen, CEO/Port Director, said in an interview with World Maritime News on the sidelines of Nor-Shipping 2019 event.The overall aim is to make the South Port a large energy ecosystem — to use the energy smarter but also to get smoother logistics between sea and land transport, as explained by Heidi Leander Neilson, Head of Environment at Oslo Port.Watch the full interview below to learn more about how the port wants to get the area effective with the help of clean fuels and all-electric equipment.<span data-mce-type=”bookmark” style=”display: inline-block; width: 0px; overflow: hidden; line-height: 0;” class=”mce_SELRES_start”></span>Specifically, the Oslo Port is responsible for around 55,000 tons of CO2 per year. The greatest sources of emissions at the port are foreign ferry routes, followed by shore activities such as cargo handling and transport at the port site and local ferries.The port has embarked on a number of initiatives that would help it cut its emissions. One of these is a new shore power facility at Vippetangen that opened in January 2019. The transformer contributes to lower climate gas emissions by providing ferries with shore power.In addition to Color Line ships, ferries operated by DFDS and Stena Line now also get power at the port when at berth.World Maritime News Staff; Images by WMN.last_img read more