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Dutch pension funds’ average funding would increase by 2 percentage points as a result of the introduction of a new accounting mechanism for the coverage ratio, according to pensions advisers Mercer and Aon Hewitt.Both consultants looked at the effect of the introduction of the 12-month average of the coverage ratio – instead of the three-month average of interest rates – as part of the new financial assessment framework (FTK), which is to go into effect on 1 January.Mercer estimated that the average coverage ratio had increased by 1 percentage point to 110% in November, the same level reported at the end of 2013.In its monthly monitoring report, it estimated that, if interest rates and investment markets remained level, the average funding would fall by 2 percentage points to 108% in December. According to Aon Hewitt, average funding at the end of November was 109%.Dennis van Ek, an actuary at Mercer, said the new ultimate forward rate, which will also go into effect on 1 January, will come at the expense of 1 percentage point of the average coverage.He added that the expected average funding under the new rules would be 109% at the end of 2014.The coverage is expected to drop to 107% over the course of 2015, following the gradual decrease of the 12-month average effect, Van Ek said.Aon Hewitt estimated that the average coverage at year-end would be between 109% and 110%, if the new FTK rules were applied.However, the consultancy forecast that, if both interest rates and investment markets did not change, the funding would gradually decrease to 102% over 2015.Aon Hewitt based its calculations for the average coverage ratio on an investment mix of 54% fixed income, 32% equity, 8% property, 2% hedge funds and 4% liquid assets.Mercer derived its figures from the latest statistics from pensions supervisor De Nederlandsche Bank (DNB) on average funding, as well as asset allocation.It also factored in an average interest hedge of 37% and a currency hedge of 50%.Mercer further noted that the 30-year swap rate had dropped from 2.73% to an absolute low of 1.61% over the course of 2014.As a consequence, pension funds’ liabilities have jumped by approximately 15%.However, Van Ek pointed out that excellent returns on investments had largely offset this rise in liabilities.He added that, based on the current market rates, the funding of Dutch pension funds would be 106% on average at present.
Koolmees’ amendment was prompted by MPs who noted that the funding ratio of Aon’s Dutch pension fund had increased significantly after relocating to Belgium, and had objected to what they described as “supervisory arbitrage”.Answering questions from Steven Weyenberg, MP for the liberal democrats D66, Koolmees had argued that the amendment was allowed by the Treaty on the Functioning of the European Union, which stipulated that more than one member state had to be involved for free movement of services and capital.Van Meerten, however, contested the minister’s argument.The lawyer said he had already informed the government of a recent verdict from the European Court of Justice, which said that such an agreement was not needed.He said that he had therefore concluded that the same rules should apply for both cross-border and local collective value transfers.In his opinion, were the government to stick to this distinction, the consequence would be that participants would be able to refer to the same rules to potentially block a value transfer between schemes in the same country.A spokesman for the minister said that the verdict had to be assessed first before a response was possible.Since 1 January 2016, €4.3bn of pension assets have moved from the Netherlands to Belgium and Luxembourg.Recent data from the Belgian regulator indicated that assets from foreign schemes had boosted the country’s total assets by 18%. The Dutch cabinet’s decision to set stricter conditions to collective cross-border pension scheme transfers is in conflict with European rules, Hans van Meerten, professor of European pension law at Utrecht University, has claimed.Talking to IPE’s Dutch sister publication Pensioen Pro, Van Meerten questioned the decision by Wouter Koolmees, the minister for social affairs, to raise the bar for schemes seeking to move outside of the Netherlands.Under the updated rules — brought in as part of the Netherlands’ implementation of IORP II — a cross-border collective value transfer from the Netherlands can only go ahead if two-thirds of a pension fund’s participants agree.Prior to this, only the approval of a scheme’s accountability board was needed.
Former Manchester United boss David Moyes says the club should stand by under-pressure manager Louis van Gaal.Van Gaal’s side have slipped out of the Premier League’s top four and exited the Champions League during a run of eight games without a win.”What Manchester United stand for is that they keep their managers, they’ve always supported their managers,” Moyes told BT Sport’s Clare Balding Show.”They don’t want to become a club which continuously changes their manager.”Moyes took over as United boss from Sir Alex Ferguson in the summer of 2013 but was dismissed after just 10 months in charge.Van Gaal was appointed as Moyes’ replacement at Old Trafford in May 2014. “I hope they stick with Louis van Gaal, he deserves more time,” said Moyes, who was sacked by Spanish club Real Sociedad in November.”It’s still a work in progress for him, he’s made some signings and from my experience in Spain it will take time for players from abroad to settle in. So, I think they should stick with it.”Moyes was sacked by United in April 2014 with the club seventh in the Premier League with four games of the league season remaining.”My understanding was that I was going to a club which always looked after their managers, even when they were in trouble and it wasn’t going well, you got your time to sort things out,” said Moyes. “I was under that illusion when I was there. I had a great group of players – they had recently won the Premier League under Sir Alex.”But it was going to take time for that to change, evolve and of course there was going to have to be a changeover of players in time. It couldn’t be done in 10 months.”On the subject of whether he would take the Old Trafford managerial job again, he added: “Of course I would. There are very few managers in the world who wouldn’t want to manage Manchester United.”–Follow Joy Sports on Twitter: @Joy997FM. Our hashtag is #JoySports