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  #671  
Old 03-13-2018, 10:27 AM
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Mary Pat Campbell
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JAPAN

https://www.reuters.com/article/us-j...-idUSKCN1GO1A3


Quote:
Japan FSA urges corporate pension funds to fulfill better corporate governance: source
Spoiler:
TOKYO (Reuters) - Japan’s Financial Services Agency (FSA) will urge corporate pension funds to demonstrate fully their ability, in its first update to a 2015 corporate governance code, a government source with direct knowledge of the matter told Reuters.

Women walk under a sign of Japan's Financial Services Agency in Tokyo, Japan June 29, 2017. Picture taken June 29, 2017. REUTERS/Issei Kato
The recommendation is aimed at achieving higher levels of pension investment and to facilitate dialogue between pension funds and companies they invest in, the source said on condition of anonymity as he is not authorized to speak to media.



The FSA will put forward its proposal at a panel meeting on the stewardship code and corporate governance on Tuesday, the source said.

Since Prime Minister Shinzo Abe swept to power in late 2012, he has been pushing for greater corporate governance and transparency through measures such as boosting the number of outside directors.

To achieve this, the FSA will urge listed companies to have their pension funds enhance expertise in investment, and to appoint the right people in order to fully demonstrate their function as“asset owner”, the source said. The agency will specifically call on listed companies to disclose efforts.

Analysts have long pointed out that Japan’s corporate pension funds lack adequate functions to check investments, as some of them put inexperienced people in investment roles and others pass on the whole investment to institutions.
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  #672  
Old 03-13-2018, 10:53 AM
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UNITED KINGDOM
UNIVERSITIES

https://www.timeshighereducation.com...ensions-crisis
Quote:
USS strike: regulator is to blame for pensions crisis
The Pensions Regulator, not universities, is the driving force behind proposed cuts due to its nonsensical approach to discount rates, argues David Bailey and John Clancy


Spoiler:
Last September the Pensions Regulator sent a letter to Sir David Eastwood, chair of the Universities Superannuation Scheme (USS).

The letter reprimanded the scheme and him for apparently not being upfront about the scheme’s liabilities and also questioned plans for dealing with its presently assessed liabilities.

Axe left in wood
USS strike: we need an honest debate about pension ‘facts’
READ MORE
It was a badly judged intervention by the regulator.

It seemed that despite big growth in its assets, the USS - the biggest pension fund in the UK with £60 billion of assets - had seen its liabilities grow at an even faster rate.

You could say that the USS was trying to steer a prudent and practical course through some pretty stormy financial waters.

The Pensions Regulator didn’t like that course, though, and put his foot down.

A more considered reading of the altercation suggests, instead, that the real problem is a regulator pretty much in denial and unable to recognise a wider crisis.

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In fact, we’d argue that the regulator should stand up for pensioners, businesses and the taxpayer, or resign. Here’s why.

The crisis has actually been exacerbated by the regulator’s office itself failing to take action on what is one of the most pressing – albeit under-reported - issues in modern British economic life: allowing the discount rate for UK pension funds to fall precipitously.

Specifically, the regulator has allowed them to fall to very low levels in the context of a wider market where interest rates and bond yields have fallen.

And quantitative easing (QE) was also ignored by the regulator as having a big impact on discount rates.

Why does this matter?

The discount rate is one of the final pieces of the jigsaw when a valuation is made of the health of a pension fund. It’s designed to calculate (for some purposes) the ultimate figure for liabilities of a fund.

The first big number before the discount rate is applied is how much the total figure is that the fund is obliged to pay out to every member from that day and into the future, until everyone in that scheme that day is dead.

The challenge here is that this is future money, or rather future liabilities. So, those valuing pension schemes have to take into account the value of that future liability figure in today’s money.

And the standard way to do this is to apply a calculation, a rate, to these future liabilities. It’s called the ‘Discount Rate’. Perhaps counter-intuitively, though, the lower the discount rate, the higher become the judged liabilities in today’s money. And vice versa.

As the former interim chief executive of Carillion said to the Joint Business and Pensions Committee last month: “Each time the discount rate falls by 1 per cent it adds £600 million to our pension fund deficit.” The pension fund issue was a big factor in Carillion going bust.

For the USS in particular, discount rates have halved in the matter of a few years as market gilt yields have catastrophically - for pension funds at least - fallen with QE.

In 2008 the scheme had a surplus of £700 million and was 103 per cent funded. It had a normal discount rate of 6.4 per cent. By 2013 its discount rate was 4.8%.

With gilts yields plummeting to around 1.5 per cent last year, the initial discount rate used by USS and others to assess liabilities fell as low as 3.2 per cent.

So the calculations put the scheme at just 83 per cent funded and with a deficit of £12.6 billion, which really was nonsense, economically.

Index-linked gilts were actually giving negative yields (as much as -0.09%) in the market place from 2014-17, which was effectively a double whammy to many pension funds.

This resulted in such a crazy set of calculations that the USS then had to come up with another method for discounting its liabilities based on the actual spread of investments and by choosing a range of different discount rates.

But they shouldn’t have had to do this. The regulator should have acted years ago.

So a big issue here is not the failure of the USS to take prompt action (it has in fact, repeatedly), rather it’s the fact that the regulator’s office itself has failed to protect pensioners of the USS (the biggest pension fund in Britain) as well as many other UK private and public pension schemes.

The regulator has left it to the funds themselves to ensure they are taking advice from their actuaries about the discount rate applied and the wider interest rate environment.

Rather, the regulator should have given forward guidance to pensions actuaries about adjusting what their training has told them to do in the context of a post global financial crisis world where QE has depressed interest rates and bond yields.

Previously used formulae and rates simply no longer apply in the economic and political world as currently operating. Certainly the regulator should have thought of this.

The Pensions Regulator could and should advise caution to pensions actuaries in using current rates and formulae (especially the implied Discount Rate) emanating from the current QE-induced artificial market.

A floor has already been put on Discount Rates elsewhere in Europe – that’s what should have happened here, especially as soon as QE started in the UK and United States.

As the Governor of the Bank of England, Mark Carney, said just last month: “These are interest rate cycles unlike those experienced in the past… in past rate cycles the average rate was 5 per cent and since all the way back to the founding of the Bank of England in 1694 rates also average around 5 per cent.”

We would suggest a discount rate floor at an appropriate rate of at least 2 per cent above that, at 7 per cent as a floor now.

In other words, the regulator should regulate. Then we might have a more realistic view of what liabilities are and whether there really are such substantial ‘deficits’ in pension schemes including the USS.

Perhaps the USS could itself lead the way. Its chair is a modern historian with economic history to the fore. A long view of history should prevail, we’d argue.

John Clancy is a pensions analyst and former Leader of Birmingham City Council. David Bailey is a professor of industry at the Aston Business School in Birmingham.

https://www.professionalpensions.com...m_term=CONNING
Quote:
USS agreement reached but members call for 'no capitulation'
Spoiler:
Universities UK (UUK) has come to an agreement with the University and College Union (UCU) over the future of the Universities Superannuation Scheme (USS), reducing entitlement but maintaining defined benefit (DB) accrual.

Under the deal, struck last night with mediation service Acas, the DB element of the scheme will now remain open to academics for another three years, with the deal covering the period from 1 April 2019 to 31 March 2022.

UUK had hoped to effectively close the scheme to future accrual by reducing the salary threshold from £55,500 to £0 from April in order to stem the growth of a bitterly-contested £6.1bn funding deficit, based on the scheme's closure. Without ending accrual, the trustees expected the deficit would be £7.5bn on the same measure, but with a more moderate approach to investment risk.

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The terms of the transitional deal state the salary threshold will be reduced from £55,500 to £42,000, with 19.3% employer contributions and 8.7% employee contributions, up from 18% and 8% respectively.

Any earnings over DB threshold will be pensionable at a 12% contribution rate into a defined contribution (DC) element of the scheme.

Further, the accrual rate will be reduced from 1/75th to 1/85th, and the ability to put an additional matched 1% contributions into the DC scheme will be removed. Indexation revaluation will be reduced from CPI capped at 10% to CPI capped at 2.5% per annum, while death-in-service and ill-health benefits will be revised to the new accrual rate.

In the meantime, an independent expert valuation group will be convened to deliberate the correct valuation methodology and assumptions for the scheme, while both sides of the argument will explore risk-sharing alternatives for the future from 2020, including collective defined contribution schemes.

It is hoped the deal - struck after a number of universities broke rank with UUK and criticised the decision to close the scheme - will see an end to widespread strikes which have rocked the higher education sector over the last three weeks.

The transitional deal is, however, subject to consultation with both UUK and UCU members, as well as subsequent agreement at the USS joint negotiating committee which will take place on 14 March.

In a brief statement on Twitter, UCU said the deal had been sent to members yesterday evening, while its higher education committee and branch representatives would meet to discuss it today.

Member reaction
The deal has not been received well, however, with many academics and individual branches of the UCU taking to Twitter to condemn and reject the deal shortly after it was announced, calling for "no capitulation".

Over 7,000 people have signed an open letter calling on the union to "reconsider its position" on the transitional deal. The letter states: "The current agreement kicks a serious solution to the pension dispute in the long grass, committing to a three-year process of re-evaluation. It further does so at the very moment we are strongest and able to force a more decisive victory.

"The employers' valuation has been demonstrated to be bogus, yet the UCU leadership is now accepting to increase our contribution while we re-evaluate. Employers' contributions will rise by only 1.3%.

"In three years' time, we will be demobilised and pressured to accept a worse deal. In our opinion, we should keep going and throw UUK's offer out altogether."

The University of Kent branch of the union said the deal was "a huge betrayal of our sacrifice".


University of Kent UCU
@UoK_UCU
FAO @UCU HQ: Over 100 members of Kent Branch UCU have expressed very strongly their view that the proposed deal stuck at ACAS should be rejected outright. We consider the deal to be a huge betrayal of our sacrifice. #NoCapitulation

18:33 - 12 Mar 2018
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  #673  
Old 03-13-2018, 03:03 PM
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Mary Pat Campbell
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UNITED KINGDOM
UNIVERSITIES

https://www.ft.com/content/f32092d8-...e-cc62a39d57a0

Quote:
UK university strikes to continue as academics reject pensions deal
Plan to guarantee benefits for members but water them down from April
Spoiler:


A strike by university academics which had led to disruption for students at more than 60 UK campuses is to continue after union members rejected a deal drawn up to end a bitter dispute over pensions.

On Tuesday, the University and College Union (UCU), the trade body for academics and higher education staff, said its union branches had “made it clear” that they did not accept an agreement brokered with university employer chiefs on Monday.

The deal, agreed after six days of talks with Universities UK at ACAS, had proposed keeping guaranteed pension benefits for members but watering them down from April next year, prompting member protests outside UCU headquarters in London on Tuesday.

“Branches made it clear today that they wanted to reject the proposal,” said Sally Hunt, general secretary of the UCU.

“UCU’s greatest strength is that we are run by and for our members and it is right that members always have the final say.”

“The strike action for this week remains on and we will now make detailed preparations for strikes over the assessment and exam period. We want urgent talks with the universities’ representatives to try and find a way to get this dispute resolved.”



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  #674  
Old 03-14-2018, 04:39 PM
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UNITED KINGDOM
UNIVERSITIES

https://www.ai-cio.com/news/uk-unive...-pension-deal/

Quote:
UK University Strikes Continue after Union Rejects Pension Deal
UCU gearing up for additional 14-day strike during exam, assessment period.


Spoiler:
After it seemed that a major UK pensions strike had reached a Monday deal, the union soundly rejected the proposal the following day, with a second wave of strikes planned.

The strike between Universities UK (UUK) and the University and College Union (UCU), now in its fourth week, has seen several discussions over changes to the University Superannuation Scheme’s defined benefit plans. If the UCU had supported the deal, the strike, in which 65 universities are participating, would have been suspended Wednesday. Much to the disappointment of UUK, the UCU chose to continue to strike for a proper deal after Tuesday discussions at its headquarters and responses from several of its union branches.

As per the proposal, defined benefits were to be protected under transitional arrangements that would begin April 1, 2019, and last until 2022. During this time, university employers and employee contributions would have increased to 19.3% and 8.7%, respectively. Both sides were also to explore risk-sharing alternatives, such as collective defined contributions.

“Branches made it clear today that they wanted to reject the proposal. UCU’s greatest strength is that we are run by and for our members and it is right that members always have the final say,” UCU general secretary Sally Hunt said in a statement. “The strike action for this week remains on and we will now make detailed preparations for strikes over the assessment and exam period. We want urgent talks with the universities’ representatives to try and find a way to get this dispute resolved.”

Union branches rejected the proposals almost immediately after they were announced Monday.

“Members in our branch and across the country did not join one of the most impressive shows of collective solidarity in the face of restrictive trade union laws for a compromise offer that does not guarantee them decency in retirement,” Liverpool UCU said in a statement shared on social media. “Liverpool UCU calls on all branches to reject this unacceptable offer and demand that UCU ensure a deal is brought about that is commensurate to the sacrifice of their members.”

Last week, the UCU warned that if the pension dispute was not resolved, an additional 14 days of strikes would occur, hitting the exam and assessment periods between April and June. In the announcement, the UCU said it would gather information on which strike period would hit which universities the hardest.
https://www.timeshighereducation.com...s-pension-deal
Quote:
UK university strikes to continue as UCU rejects pension deal
Universities UK describes decision as ‘hugely disappointing’
Spoiler:
Strike action will continue at 65 UK universities after members of the University and College Union vetoed a deal struck by employers and union leaders on pension reform.

Branch representatives and the UCU’s higher education committee both voted on 13 March to reject an agreement with Universities UK that would have protected defined benefits under the Universities Superannuation Scheme for three years, but at a lower rate, and in return for an increase in contributions.

Strike placards
Employers strike deal with UCU leaders in USS pension talks
READ MORE
Scheme members had said that the proposed settlement, which would have been for a three-year transitional period, would not offer a decent income in retirement.

A week-long walkout, which could have been suspended as of 14 March, will now continue, and the UCU will draw up plans for a further 14 days of strike action, timed to coincide with the exams and assessment period.

Sally Hunt, the UCU’s general secretary, said that branches’ views were “clear” and that it was “right that members always have the final say”.

“The strike action for this week remains on and we will now make detailed preparations for strikes over the assessment and exam period,” she said. “We want urgent talks with the universities’ representatives to try and find a way to get this dispute resolved.”

A UUK spokesman said that it was “hugely disappointing that students’ education will be further disrupted through continued strike action”.

The dispute centres on UUK’s original proposals to end defined benefits, which guarantee scheme members a certain income in retirement, under the USS. UUK says that it needs to close a £6.1 billion deficit in the scheme, but the UCU claimed that the changes would leave the typical lecturer £10,000 worse off annually in retirement.

The deal struck at the Advisory, Conciliation and Arbitration Service would have protected defined benefits under transitional arrangements set to take effect in April 2019 and expected to last three years. However, they would only have accrued on salaries of up to £42,000, rather than £55,000, as is currently the case.

Contributions from universities and staff would also have increased, to 19.3 per cent for employers and 8.7 per cent for employees (currently 18 per cent and 8 per cent respectively), and an independent valuation group would have been convened to examine the reported deficit.

In a message to members, the UCU’s Ms Hunt said that the “overwhelming view” of branches had been that the threshold for defined benefits was too low and that the proposed reduction in the accrual rate was “also unacceptable”.

“Branches were also clear that the refusal of the employers to shift their position on taking more risk was disappointing,” she said.

The UUK spokesman said that university leaders “engaged extensively with UCU negotiators to find a mutually acceptable way forward”.

“The jointly developed proposal on the table, agreed at Acas, addresses the priorities that UCU set out,” he said. “We have listened to the concerns of university staff and offered to increase employer contributions to ensure that all members would receive meaningful defined benefits.

“We recognised concerns raised about the valuation and have agreed to convene an independent expert valuation group.

“Our hope is that UCU can find a way to continue to engage constructively, in the interests of students and those staff who are keen to return to work.”
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  #675  
Old 03-15-2018, 04:58 PM
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Mary Pat Campbell
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UNITED KINGDOM
BRITISH STEEL
TATA

https://www.ai-cio.com/news/new-brit...eme-goals-met/

Quote:
New British Steel Pension Scheme Goals Met
BSPS plans, Tata Steel merger with Thyssenkrupp can now go forward.
Spoiler:
After meeting certain qualifying conditions, the new British Steel Pension Scheme (BSPS) will continue as planned.

The new fund, backed by Tata Steel UK, a division of India’s Tata Steel, has met the minimum size and initial funding test level, which will allow for a merger with Germany’s Thyssenkrupp.

According to Allan Johnston, the new BSPS trustee chairman, the plans will move forward on March 28, with the BSPS closing to future accrual on March 31.

“This is very good news for the 83,000 members who wanted to receive their benefits from the New Scheme and chose to switch to it,” Johnston said in a statement.

Last year, the British pensions regulator approved a deal where a one-time £550 million ($768.6 million) payment to the BSPS would allow for Tata Steel UK to cut pension benefits and create a new BSPS.

Reportedly some 25,000 scheme members declined to opt into the new BSPS, leaving them in the care of the Pension Protection Fund, which could potentially reduce their pension transfer value.

Following the 2017 pension predicament, Thussenkrupp and Tata announced a deal to merge their European steel operations, which is expected to close later this year. Should the agreement go through, the merger will create Europe’s second-largest steelmaker.
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  #676  
Old 03-18-2018, 09:29 AM
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UNITED KINGDOM
REGULATION

https://www.professionalpensions.com...m_term=CONNING

Quote:
White paper to be announced this week; Pensions neglect to become criminal offence

Spoiler:
A new criminal offence of neglecting pension responsibilities will be announced in a pensions white paper this week, the prime minister has confirmed.
Reports in The Telegraph and The Observer said Theresa May has pledged the tough new measures would safeguard staff from "irresponsible" executives who risk their workers' future financial security without fear of the consequences.

Announcing the proposals, May said it was "absolutely vital" that people who worked hard and contributed to society throughout their career should have "confidence" that their pension would be secure in retirement.


"I am committed to making sure our economy works for everyone - backing businesses to create good jobs but stepping in to make sure they play by the rules," she continued.

"That's why my government is making sure The Pensions Regulator has the powers it needs to crack down on the minority of businesses who shirk their responsibilities.

"The action we are taking will ensure that the majority of responsible employees, employers and pension schemes will no longer have to bail out the irresponsible few."

Dodging or abusing pension responsibilities will be made a crime under the plans and the regulator will be given powers to intervene earlier when problems are suspected.

The Insolvency Service will also be given extra powers to help protect employees and small suppliers from reckless company directors.

Echoing May's comments, work and pensions secretary Esther McVey said: "We will clamp down on and - where appropriate - punish directors who wilfully or recklessly put pension schemes at risk.

"It is right that those responsible face tougher sanctions and we need to make sure that the Pensions Regulator has the powers in place to act swiftly when action is needed."

The Pensions and Lifetime Savings Association backed the move. Director of external affairs Graham Vidler said: "We welcome the prime minister's proposals to crack down on reckless behaviour which puts DB pensions at risk. 11 million people depend on DB for their future income and a focus on protecting the security of those pensions is essential.

"As well as introducing criminal sanctions we'll be looking to the forthcoming White Paper to strengthen and clarify the Pensions Regulator's powers and to help more schemes take advantage of the opportunities of consolidation."


https://www.theguardian.com/money/20...ension-schemes

Quote:
May pledges to fine company bosses if they endanger staff pension funds
New criminal offence of neglecting pension responsibilities to be announced this week

Spoiler:
Rogue bosses will face fines or prosecution for putting the pensions of their workers at risk under new laws to be unveiled by the government.

Ministers will confirm this week that they will target reckless employers with new rules designed to protect pension pots when companies go under. There will also be measures designed to target directors who are guilty of mismanagement.

The move follows the scandals that hit retailer BHS and construction giant Carillion after their collapses. It comes after Theresa May told the Observer earlier this year that she wanted to tackle bosses who “line their own pockets” while failing to protect workers’ pension schemes.

It has recently emerged that the board of Carillion dismissed a proposal that could have poured £218m into its pension scheme, believing the company could recover. The pot is now estimated to be nearly £1bn in deficit. A total of 28,000 members of Carillion’s 13 pension schemes are facing a cut to their retirement funds.


Guardian Today: the headlines, the analysis, the debate - sent direct to you
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Meanwhile, the BHS pension scheme is believed to have a deficit of £571m after the department store collapsed last year. Former owner Sir Philip Green has since agreed to give £363m in cash to rescue the scheme, a move that could help the businessman keep his knighthood after calls for the honour to be removed.

Under the measures to be confirmed this week, ministers will announce a criminal offence of shirking pension responsibilities. It will become easier for the Pensions Regulator to intervene early when it detects issues. There had been strong demands for action from a parliamentary inquiry into the BHS crisis that backed huge fines for companies failing to protect pension funds.

On Saturday, the prime minister said that it was “absolutely vital that people who work hard and contribute to society throughout their career can have the confidence that their pension will pay out in retirement”.

“I am committed to making sure our economy works for everyone – backing businesses to create good jobs but stepping in to make sure they play by the rules,” she said. “That’s why my government is making sure the Pensions Regulator has the powers it needs to crack down on the minority of businesses who shirk their responsibilities.

“The action we are taking will ensure that the majority of responsible employees, employers and pension schemes will no longer have to bail out the irresponsible few.”
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  #677  
Old 03-18-2018, 09:38 AM
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UNITED KINGDOM
ARTISTS

https://www.theguardian.com/money/20...action-artists

Quote:
Artists in battle over modern artwork pension fund
The Artist Pension Trust, which holds one of the biggest collections of contemporary art in the world, is facing a legal bust-up
Spoiler:
unique initiative, designed to provide artists with a “pension”, is at the centre of a row after it emerged that some members have signed up to a group legal action in a bid to extricate themselves from the scheme.

Guardian Money understands several British artists are seeking the return of artworks they signed over to the scheme, whose website states it has around 2,000 participants worldwide, including Turner prize winners Jeremy Deller, Douglas Gordon and Richard Wright, and other well-known UK names such as Bob and Roberta Smith and David Shrigley. It’s the latest in a line of controversies to hit the Artist Pension Trust (APT) which, as the name suggests, was set up to provide artists – many of whom struggle to make a living, let alone plan for retirement – with some financial security in their old age.


Steelworkers let down by FCA and Pensions Regulator – MPs
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Founded in 2004, the APT works a bit like a co-operative. Instead of putting cash into a pension plan or Isa, the participants contribute pieces of their art, which are then put into storage and loaned out to exhibitions until the trust identifies the most profitable time to sell. The proceeds are then shared out among the artists. The theory is that because members receive a share of the sale of others’ work, it can help protect artists should the value of their own work plummet. Inevitably, the more successful artists end up subsidising less successful ones - or, as the APT puts it, “the big-name artists behind blockbuster shows can support the work of talented peers still gaining art world recognition”.

The APT has now amassed one of the world’s largest collections of contemporary art, made up of around 13,000 works, which is said to be growing by more than 2,000 pieces a year. How it works is that the artists contribute pieces over many years, and then these are gradually sold. Of the money raised from the sale of each piece, 40% goes to the individual who originally created the work, and 32% is shared out among the artists in that particular trust (there are eight regional trusts, plus a global one), based on the number of artworks they have deposited. The remaining 28% is retained by the APT to cover costs and make payments to its backers, who have provided more than $32m in funding – it’s a “for-profit” venture.

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The scheme was presumably set up to prevent artists living out the stereotype of ending up penniless and starving in a garrett - but it appears some of the participants now wish they had never got involved. Money understands that more than 20 UK artists are embarking on the group legal action because they are unhappy with the way the scheme is being run, and there has also been a bust-up in the US, with Los Angeles-based artist Kristin Calabrese telling us this week: “If they would let me out of the contract and give me my work back, I would happily accept.” This row has been brewing for a while: in April 2017 the Telegraph reported that 18 works in the APT collection – including pieces by Deller, Gordon, Wright and Shrigley – were pulled from a Sotheby’s contemporary art sale in London at the last minute. The MutualArt group, which includes APT, was reported as saying that the artists and their galleries took the view “that auction was not in their best interests ... some of the galleries said they could get better prices”. A subsequent news report on the website artnet claimed the move “puts a question mark over the ability of APT to manage its fund as it chooses”.

After this, APT changed its sales policy, but angered some members by proposing a storage fee – reportedly $6.50 (£4.65) a month for each work they want to store – prompting claims that the scheme had increasingly become about making money. Among those angry about the fee was Calabrese, who set up a Facebook group called APT Artist Solidarity, which claims to have 957 members. She says a New York lawyer “got APT to stick to the original contract here in the US, so I’m okay with it for now... [But] I feel like I was taken advantage of when they got me to sign up in the first place, back in January of 2006”. As a result of the row, this fee has now been put on ice.


Brexit would hit property values, plus why pensions are so complicated
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Now things have kicked off in London, where MutualArt is based (it gives its address as care of a company called Art Trading Services based in Covent Garden). One of those involved in the group action says legal advice had raised concerns. The aim of the action, says the artist, is “to ensure the return of deposited artworks and extricate themselves from the scheme”.

Zohar Elhanani, the venture’s chief executive, tells Money it hasn’t received anything about the group action, adding “the majority” of the artists are “very pleased” with the way APT is run. He says: “It’s a minority that’s very negative in its approach ... A loud minority that is voicing their frustration or anger, and I’m not sure it’s warranted.”

Elhanani says the APT’s “mutual assurance” model works, in that artists whose work has not sold have received payouts from the scheme. And on the storage fee, “we listened to the artists and did not pursue that”. He adds: “We are hopeful many of the artists - even the ones who were very vocal - do come round and realise that the base premise of the programme... has significant merit and benefit to the artist.”



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Old 03-18-2018, 01:27 PM
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UNITED KINGDOM
CREST HEALTHCARE

https://www.ai-cio.com/news/crest-he...-requirements/

Quote:
Crest Healthcare Admits Shirking Pension Requirements
Firm and managing director plead guilty to misleading The Pensions Regulator.


Spoiler:
Birmingham, England-based healthcare company Crest Healthcare and its managing director have pleaded guilty to misleading UK watchdog The Pensions Regulator (TPR) about providing employees with a workplace pension.

Appearing before Brighton Magistrates’ Court, Crest Healthcare and Managing Director Sheila Aluko each pleaded guilty to one charge of knowingly or recklessly providing false or misleading information to TPR, and two charges of willfully failing to comply with their automatic enrollment duties. Both charges carry a maximum penalty of an unlimited fine, and sentencing will take place on May 15.

“Sheila Aluko tried to conceal her company’s non-compliance by hiding behind false information and misleading her staff that their pensions were up and running,” said Darren Ryder, TPR’s director of automatic enrollment, in a release. “It was only after we intervened that the employer finally complied with its duties and provided its staff with the workplace pensions they were entitled to.”

According to TPR, in March of 2016, Aluko submitted a declaration of compliance to TPR claiming that Crest Healthcare had complied with its duties. She claimed staff had been written to about the pension plan, and said 25 employees had been enrolled into a workplace pension.

However, TPR says Crest had not completed setting up a workplace pension, had not automatically enrolled any staff, and had also not written to its staff to tell them about automatic enrollment, as it was legally required to do. Additionally TPR says no pension contributions had been paid. Despite this, the company still deducted pension contributions from its workers’ wages, but kept them in the company’s bank account and did not pay them into a pension for more than eight months, said TPR.

The regulator said it was only made aware of the negligence “after a whistleblower raised the alarm,” and TPR executed a search warrant at Crest Healthcare’s offices and interviewed Aluko.

“While the majority of employers are doing the right thing, this case sends a clear message that it is unacceptable to dodge your pension responsibilities,” said Ryder, “and that we will take action against those who try to.”


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Old 03-19-2018, 07:16 AM
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http://www.pionline.com/article/2018...19#cci_r=73393

Quote:
Senate working on retirement savings package
Mix of initiatives has something for both DB and DC sponsors


Spoiler:
An eclectic package of retirement savings initiatives that would please plan sponsors worried about testing their defined benefit plans or maxing out contributions to defined contribution plans is quietly working its way through Congress, raising hopes that new ideas like open multiple employer plans and more lifetime income options are within reach.

"There are a lot of changes that are beneficial to plan sponsors and employers who are trying to offer efficient plans to participants, and to make those plans available and better functioning," said Shai Akabas, director of economic policy at the Bipartisan Policy Center in Washington.

Mr. Akabas sees the package as the promise of an even greater focus on retirement security. "I ​ expect to see more proposals offered, hopefully bipartisan. I do think this will hopefully be the start of putting this back in the spotlight," he said.

RELATED COVERAGE
Multiemployer pension reform effort launches in WashingtonSenate retirement savings bill reintroducedCongressional retirement report calls for more actionBipartisan multiemployer hybrid plan bill introduced in House
The proposed Retirement Enhancement and Savings Act of 2018 was introduced March 8 in the Senate by Finance Committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore.

The bipartisan package, which mirrors a proposal introduced in the last Congress and unanimously approved by the Finance Committee, was expected to win Senate approval this month, and a House counterpart was introduced March 14. For now, its most likely path is to be included in a must-pass spending bill that both chambers have to address before the end of the month.

The bill covers a lot of retirement savings ideas, few of which are considered controversial.

"RESA is the product of a lot of different viewpoints and perspectives," said Lynn Dudley, senior vice president, global retirement and compensation policy for the American Benefits Council in Washington, who noted it addresses many of the group's policy recommendations. Another plus, she said, is "if you pass them, they make a difference immediately."

For sponsors of closed defined benefit plans, one provision of the bill makes it easier to comply with non-discrimination testing rules and to have related make-whole contributions to defined contribution plans.

Currently, some employers are finding themselves forced to freeze their DB plans to avoid running afoul of non-discrimination testing rules that become harder to pass each year as participants in closed plans get older and more highly compensated. "Every year, more sponsors have to grapple with this issue, and every year, more participants risk losing future benefits," said Ms. Dudley, who estimates that as many as 250,000 plan participants are at imminent risk.

RESA also calls for lifting a 10% safe harbor cap on default contributions for automatic enrollment and escalation in defined contribution plans. That will be increasingly important over time as more companies look to automatic enrollment and other ways to provide retirement security, said Ms. Dudley. "The flexibility to address this going forward is huge," she said.

Plans sponsored by cooperatives and small-employer charities would enjoy a much smaller premium to the Pension Benefit Guaranty Corp. under the bill, $19 per participant vs. $74 that single employers will pay for 2018.

Another section of the bill would make it easier to form open multiple employer plans. The plans would be of help to larger employers that use more independent workers and would like to offer paths to retirement savings. "Open MEPs are great for the gig economy, and it's a federal solution, not state by state. It is really important and it's the future," Ms. Dudley said.

Multiple employer plans also give smaller employers that want to offer defined contribution plans institutional buying power, said Robert Melia, executive director of the Institutional Retirement Income Council, a Washington-based non-profit retirement industry think tank of plan advisers, consultants and service providers.

His group's long-standing concern over plan participants being enticed into individual retirement account rollovers also would be addressed in the bill's proposals to promote lifetime income strategies within defined contribution plans and require plan sponsors to provide annual statements showing lifetime income coverage. "Having your projected balance presented to you as an income stream will be a real wake-up call," said Mr. Melia.

Plan sponsors worried about the fiduciary risk of vetting annuity providers would enjoy "a very easy safe harbor," he said, because the bill would allow the sponsors to rely on the insurers' representations of solid legal and financial footing. Those annuities would be portable under the bill, which treats a departing employee taking annuities elsewhere as a distributable event.

The bill's focus on lifetime income is good "as long as it is permissive and it is up to the plan sponsor whether they want to offer them," said Alan Glickstein, Dallas-based senior retirement consultant at Willis Towers Watson PLC. "What sponsors want is to be able to help people be able to leave the workforce. If we evolve to a world where lifetime income options are more available, they would be a much better option than defined benefit plans, which are closing."

Mr. Glickstein is less enthusiastic about the bill's call for sponsors to annually disclose lifetime income, a sentiment shared by the ERISA Industry Committee in Washington, which would like to see some tweaks. Disclosure "is a different animal. It's going to create much more confusion over time as interest rates change," he said.

Mr. Melia of IRIC said plan sponsors "just have to evolve. It's more about where the market is going and what provides the most security. It's just another way that you can meet the mission of your company and what you're trying to do" to promote retirement security, he said. "It's just common-sense reform that helps people save for retirement."


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Old 03-19-2018, 07:21 AM
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http://www.pionline.com/article/2018...top-32-billion

Quote:
2018 corporate pension contribution tally to top $32 billion
Tax reform, PBGC fees drive U.S. companies to open their wallets


Spoiler:
U.S. corporations plan to contribute some $32 billion to their global pension funds this year, according to Pensions & Investments' analysis of individual companies that announced contributions of at least $100 million.

Among the 58 companies P&I reviewed, six said they would contribute more than $1 billion each and another 11 companies said they would contribute between $500 million and $1 billion in 2018, based on 10-K filings with the Securities and Exchange Commission through March 14. Those 58 companies contributed a total of $34.2 billion to their global pension funds in 2017, at least $8 billion of which took place in the fourth quarter.

This year's review covered 99% of S&P 500 companies that have filed their annual 10-K statements.

RELATED COVERAGE
Exxon Mobil readies $1.21 billion contribution for global pension plansDelta navigates $500 million contribution for pension plansUnited Continental charts $420 million contribution for pension plans
General Electric Co., Boston, promised the largest contribution of the companies reviewed, announcing in an investor update in November that it planned to contribute $6 billion to the GE Pension Plan, its primary U.S. plan, in 2018. According to its newly filed 10-K, GE contributed a total of $2 billion to its pension plans in 2017 and had a U.S. plan funding ratio of 67.2% as of Dec. 31, up from 64.2% the previous year.

Lockheed Martin Corp., Bethesda, Md., said it will contribute $5 billion to its U.S. defined benefit plans in 2018 after contributing $46 million in 2017. Lockheed Martin said in its 10-K filing it will not have to make any further contributions until 2021. As of Dec. 31, the company's U.S. plan funding ratio was 68%, down from 69.7% the previous year.

And FedEx Corp., Memphis, Tenn., plans to contribute $1.75 billion to its U.S. defined benefit plans in 2018. In its previous fiscal year, FedEx contributed $2 billion. As of May 31, 2017, FedEx's U.S. defined benefit plans had a funding ratio of ​ 89.5%, up from 82.8% the previous year.

Tax bill fuels surge
Matt McDaniel, Philadelphia-based partner in Mercer's U.S. wealth business, said in an interview that corporate interest in accelerating contributions — contributing several years' worth of required contributions in one year — is high.​

One primary reason corporations have been accelerating contributions since the beginning of last year is the anticipation of looming tax reform, Mr. McDaniel said.

"Tax reform passed very late in the year in 2017," Mr. McDaniel said. "A number of plan sponsors anticipated tax reform, another set of sponsors weren't really sure. We really didn't get that finality."

The Tax Cuts and Jobs Act, signed into law by President Donald Trump on Dec. 22, reduced the corporate tax rate to 21% from 35%. Current tax law allows a plan sponsor to deduct a portion of its pension contributions based on its tax rate.

Corporations have until Sept. 15, the final tax deadline, to deduct those contributions at the higher 2017 rate, Mr. McDaniel said. "It's the last gasp in the next six months to take advantage of that. We're working with a lot of plan sponsors on that."​

Matthew Siegel, Stamford, Conn.-based senior consultant with Willis Towers Watson PLC, also sees companies mulling additional contributions.

"In 2018, we're still seeing a lot of organizations contemplating additional contributions that can be deducted in 2017," said Mr. Siegel, "and we've seen a number of large ones come out that, in effect, they're going to accelerate what they see as expected contribution requirements over the next several years."

Mr. McDaniel also noted that while companies are required to report expected contributions, "there's nothing that stops them contributing more or less than that amount."

A number of corporations followed that pattern in 2017, including United Parcel Service Inc., Atlanta, which announced in February it had contributed an additional $5 billion to its U.S. plans at the end of 2017, which was in addition to the $2.3 billion it originally announced in the 10-K filing, Delta Air Lines Inc., Atlanta, which contributed a total of $3.56 billion to its U.S. defined benefit plans in March and April of 2017, well above the $1.2 billion the company had announced in its 10-K filing on Feb. 13, 2017, and E.I. du Pont de Nemours & Co., Wilmington, Del., which announced in a May 2017 SEC filing that it planned to contribute $2.9 billion to its U.S. defined benefit plan in 2017, up from the $230 million in contributions it originally announced its 10-K filing that February.

Last year's total expected contributions among 64 companies whose 10-Ks for 2016 included intentions to contribute $100 million or more was $26.8 billion.

In 2018, Delta said it planned to contribute $500 million to its plans, and DuPont, which as of Aug. 31 merged with Dow Chemical Co., Midland, Mich., to form DowDuPont, plans to contribute $200 million to its DuPont global DB plans.

PBGC hike looms
Many corporations also have accelerated contributions because of the looming hike in variable rates charged by the Pension Benefit Guaranty Corp.

The PBGC's variable rate is based on the unfunded obligations in a defined benefit plan, as opposed to the fixed rate, which is based on the number of participants in the plan. The variable rate, which was as low as $9 per $1,000 of unfunded vested benefits as recently as 2013, is $34 in 2018 and will rise to $42 in 2019.

The median funding ratio among the 58 plans analyzed as of Dec. 31 was 83.2%, up from 79.6% in 2016, an improvement despite lower discount rates, which increase liabilities. The median discount rate in 2017 among the analyzed plans was 3.7% in 2017, down from 4.3% in 2016 and 4.5% in 2015.

The declines in U.S. discount rates had long caused funding ratios to decline. According to a February Willis Towers Watson report, the average discount rate used by Fortune 1000 companies had been dropping ever since its peak at 6.29% in 2008, all the way down to 3.55%.​

In that report, Willis Towers Watson said the aggregate funding ratios of 389 companies within the Fortune 1000 that have DB plans improved to 83% in 2017 from 81%.

Willis Towers Watson's Mr. Siegel said the improvement in funding ratios even in the face of falling discount rates was due to two offsetting conditions.

"During 2017, we had discount rates fall maybe 50 basis points or so, but offsetting that was return on assets of, we think, about 13% depending on asset mixes. We also had some benefits in additional changes in mortality tables put out by the Society of Actuaries," Mr. Siegel said.

Based on Willis Towers Watson estimates, Mr. Siegel said, funding ratios as of mid-March have improved perhaps 2 to 3 percentage points above that year-end 83% figure.

"If you look year-to-date 2018 through February, we estimate that discount rates on average have increased about 40 basis points, and we're not seeing much of a change to date in March," Mr. Siegel said.

$1 billion club
The three other companies that plan to contribute more than $1 billion to their pension plans in 2018 are PepsiCo Inc., Purchase, N.Y.; FirstEnergy Corp., Akron, Ohio; and Exxon Mobil Corp., Irving, Texas.

PepsiCo plans to contribute a total of $1.575 billion to its global DB plans in 2018. In its 10-K, the company disclosed it already had contributed $750 million to the plans and planned to contribute an additional $650 million in the first quarter, and another $175 million in discretionary contributions to U.S. and international plans in the remainder of the year. PepsiCo's funding ratio for U.S. plans as of Dec. 31 was 85.1%, down from 86.9% the previous year, and the international plan funding ratio was 99.1% as of Dec. 31, up from 92.6% the previous year.

FirstEnergy contributed $1.25 billion to its qualified pension plans in January to address funding obligations for future years, the company said in its filing. The company contributed $18 million to its pension plans in 2017 and $899 million in 2016. Its 2017 U.S. plan funding ratio was 65.9%, the same as the previous year.

Exxon Mobil plans to contribute $1.21 billion to its global pension plans in 2018 — $490 million to its U.S. plans and $720 million to its non-U.S. plans.

The funding ratio for its U.S. plans as of Dec. 31 was 66.2%, up from 64.2% the previous year. The non-U.S. plans were 76.8% funded, up from 75.6% at the end of 2016.

Pension contribution tsunami
The largest pension contributions so far in 2018, ranked by total contribution in millions.
Plan sponsor Total 2018
contribution 2017 U.S.
funded status
General Electric $6,000 67.2%
Lockheed Martin $5,000 68.0%
FedEx $2,500 89.5%
PepsiCo $1,575 85.1%
FirstEnergy $1,250 65.9%
Exxon Mobil $1,210 66.2%
General Motors $970 91.5%
Raytheon $936 73.5%
Pfizer $886 85.5%
Abbvie $750 77.3%
DowDuPont $700 76.1%
AT&T $560 76.7%
Huntington Ingalls Industries $508 86.1%
3M $500 90.4%
Delta Air Lines $500 68.0%
Ford $500 95.3%
Motorola $500 69.0%
Consolidated Edison $473 91.8%
American Airlines $467 62.4%
United Continental Holdings $420 67.2%
IBM $400 100.5%
Entergy $352 76.0%
Arconic $350 66.0%
PG&E $327 88.8%
General Dynamics $315 71.3%
Exelon $301 83.1%
Harris $300 80.1%
Mondelez $289 97.7%
Sempra Energy $226 68.9%
MetLife $220 84.9%
ConocoPhillips $210 78.4%
Merck $210 91.5%
DTE Energy $200 83.2%
Prudential $200 98.7%
Caterpillar $190 77.4%
Aon $177 62.1%
Xcel Energy $150 80.7%
Duke Energy $148 106.5%
PPL $145 81.4%
BB&T $144 127.7%
Honeywell $142 104.6%
Allstate $133 92.1%
Corning $132 84.5%
Valero Energy $131 82.8%
Anadarko Petroleum $130 64.2%
Schlumberger $125 88.3%
Abbott Labs $114 93.5%
Eaton $112 90.5%
Marsh & McLennan $109 76.9%
LyondellBasell Industries $107 87.5%
American Electric Power $101 99.2%
CenturyLink $100 84.3%
Kimberly-Clark $100 92.9%
L3 Technologies $100 72.1%
Paccar $100 103.5%
United Technologies $100 96.5%
Vulcan Materials $100 77.1%
Ingersoll-Rand $75 81.8%
Source: Company reports

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