Finland’s State Pension Fund sets explicit return target for first time

first_imgTimo Viherkenttä“Seventeen years is a long time horizon, but it is not eternal, and it gives us a reason to take a look at tail risks, although we are a long-term investor.”The work on setting the annual return target to achieve this time objective has been occupying staff at the fund for most of this year, he said, but there will still be more discussion about how to adjust the portfolio and ample time to do it.From now on, the starting point for VER in building its portfolio is to find a mix of investments that will fulfil the return target over the long term, Viherkenttä explained.“I feel this is relatively ambitious, as it is not easy to find portfolios that would deliver this,” he said.VER’s investment team is already working on next year’s investment plan based on the real return target.“Tentatively, it looks as if only surprisingly small changes will be needed in spite of the new strategy,” Viherkenttä said.One element of future asset allocation will be to increase diversification in the direction of inflation protection.“One of the main things that will change is we will be looking at including more inflation-linked assets such as infrastructure, inflation-linked bonds and real estate,” Viherkenttä said.“But the main point is to look at how our whole portfolio fares in different environments, so this could mean doing different things, but investments in infrastructure and real estate will play a part.“It’s a mixed picture depending on how the main asset classes such as equities are performing.”Viherkenttä added that the real return target and strategy to reach it would be reassessed every year from now on.“If we had a bad investment year,” he said, “then we would need a higher annual return, so we would probably be increasing the risk in the portfolio, and that’s how it should be because, if stock markets came down next year, it would be a good time to increase the risk in your portfolio. There’s an intrinsic logic to that.”Though the fund has produced good returns over the years, Viherkenttä said it was somehow unsatisfactory that the reasoning for investment choices was not really derived from any concrete aim.“Setting this target has to do with integrity in that you have to base your activities on the very task you have been given,” he said.VER had total assets of €18.5bn at the end of September.For more on pensions in the Nordic region, see stories from IPE’s special report here Timo Viherkenttä, VER’s chief executive, told IPE in an interview: “We have this 25% funding objective we should strive for and now have specified ourselves when we should reach this, and our aim is 2033. The State Pension Fund of Finland (Valtion Eläkerahasto or VER) has come up with an explicit return target for the first time since it was set up 26 years ago, as part of a self-initiated project to firm up its investment aims and increase the integrity of its operating rationale.The fund has an aim, laid down in law, of growing and amassing enough assets to fund 25% of the state’s employee pension liabilities, but until now, the point at which this should happen has not been defined.As a buffer fund with no fixed liabilities or timescale for orientation, and dependent on inflows and outflows VER cannot influence, the fund has so far aimed for fairly generic risk-adjusted returns within the confines of its investment limits.The first target has been set at 3.4% in real terms per year and was arrived at with reference to when the Finnish state’s pension liabilities for its current and former employees – and also public age-related spending more generally – are due to peak.last_img read more

Secret test reveals pokie pain

first_imgNewsRoom 28 June 2017Family First Comment: Good point“If a venue can’t be sustainable without exploiting the poor then we don’t need it in New Zealand.”An undercover audit by the Department of Internal Affairs has found worrying problems remain in New Zealand’s gambling dens. What is being done to reduce the harm?The term “mystery shopper” may sound innocuous, but the results of an investigation into the country’s gambling venues are not pretty reading.More than half of “Class 4” pokie bars failed to meet problem gambling expectations in an undercover operation by the Department of Internal Affairs (DIA).Another third partially met expectations, while not a single club out of 22 visited fully met expectations.In the test, a group of researchers trained in mimicking problem gambling behaviour were sent to 120 pokie bars and clubs, plus all six casinos, to see how well staff reacted.Feigned problem gambling symptoms included a 12-hour stretch of play (with specified breaks of no more than 30 minutes) to see if staff became concerned.Other examples were signs of agitation and concerns expressed by a fake family member.Some actors tested staff on Eftpos declines, playing for 45 minutes then withdrawing $20 on four separate occasions from an ATM. Following another hour of play they approached staff and tried to withdraw $120. When this was declined, they would try to withdraw $80, then $40, to see if staff gave them advice.Under guidelines, staff should make a general comment about help available, provide a help leaflet and record the incident in a log book. Almost all class 4 venues failed this test.All six New Zealand casinos were visited, and performed better than their smaller counterparts.Significant improvements were made from the 2014 survey, with SkyCity’s venues performing particularly well. More than half of mystery shoppers were provided with help-seeking information by staff, compared with only seven percent in the earlier audit.Christchurch and Dunedin casinos also made progress, but did not perform as well as SkyCity.Saddening, but unsurprisingMore money is spent on pokies than any other form of gambling in New Zealand.In the 2015/16 financial year $843 million was spent on gaming machines outside of casinos – the highest amount since 2011/12.During the same period, $342m was spent at the TAB, $437m on lotto and scratchies, while $586m was flitted away at casinos.The total amount spent on gambling in 2015/16 rose 5.6 percent compared to the previous year.With the DIA’s mystery shopper results, new questions have been raised about whether enough is being done to monitor gaming venues.READ MORE: https://www.newsroom.co.nz/2017/06/28/36507/secret-test-reveals-pokie-painKeep up with family issues in NZ. Receive our weekly emails direct to your Inbox.last_img read more

RELAY FOR LIFE LIVE – PICTURE SPECIAL

first_imgRELAY FOR LIFE LIVE – PICTURE SPECIAL was last modified: May 25th, 2013 by StephenShare this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Telegram (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to share on Skype (Opens in new window)Click to print (Opens in new window) Tags:picture specialRelay for Lifelast_img