Norway backs down over forcing market valuation for pension funds’ bonds

first_imgShe said the industry association had been working on the matter for a long time, and was pleased the ministry had listened to its arguments.“Managing guaranteed pension products in a low interest rate regime is very challenging, where the providers are forced to take very low risk. This proposal would make it even more difficult for customers to achieve a satisfactory return,” Kierulf Prytz said.A significant portion of bond investments and loans in the customer portfolios underlying guaranteed pension products in Norway, such as defined benefit plans and paid-up policies, are accounted for at amortised cost, the ministry said.Were investments valued according to the market instead, changes in market rates could lead to increased profits or deficits on customer assets because of changes in the value of the bonds, it said.“The access to amortised cost use for a significant proportion of investments in pension funds gives pension providers a buffer against changes in market rates,” the ministry added.In the consultation, the government department said it had asked stakeholders to comment on this proposal specifically, stressing that no change was not appropriate unless it could be adequately shown to be in the customer’s favour.“The hearing responses have different views, but a majority of replies do not support the proposal from the FSA,” the ministry stated.Those against the idea said it would weaken suppliers ‘ability to manage risk and so could reduce customers’ returns, it said.“It has also been pointed out that it may be unfortunate to make such a change in a situation with a great deal of uncertainty in the financial markets,” the ministry added.The ministry said it was still considering the other regulatory proposals contained in the consultation, whose deadline was 8 April.Looking for IPE’s latest magazine? Read the digital edition here. Norway’s Ministry of Finance announced today it is not going ahead with a proposal to stop pension providers from being able to account for investments in customer funds in bonds and other loans at so-called amortised cost – a plan which would have forced them to use market valuations instead.The proposal, which has been out for consultation since January as part of an inquiry into the regulations for guaranteed pension products, had come from the Norwegian FSA (Finanstilsynet) which argued that the change to ongoing market valuation would support “neutral transfer rules” and simplification.But opponents argued – among other things – that banning amortised cost accounting for the underlying fixed income investments would mean more risk for the providers and as a result of that, ultimately lower returns for pension savers.Stefi Kierulf Prytz, director of life and pensions at lobby group Finance Norway, said: “It is an important victory for pension savers.”last_img read more

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Carver: I’ve enjoyed the experience

first_img The 50-year-old was thrown in at the deep end in January following Alan Pardew’s surprise departure for Crystal Palace, with the Magpies’ main targets unavailable. It has proved a baptism of fire as an understrength squad further depleted by injuries and suspensions has slid alarmingly down the Barclays Premier League table. John Carver is convinced he will be a stronger man for the trials and tribulations he has experienced as Newcastle’s head coach. Press Association They have now reached the point where anything less than victory over West Ham on Sunday could see them suffer the unthinkable, relegation to the Sky Bet Championship for the second time in six years. However, while Carver, as Pardew before him, has borne the brunt of fans’ frustrations as the club’s public face, he is adamant the lessons he has learned will serve him well in the future. He said: “Listen, this job… It’s about five months, isn’t it? In five months, I don’t think any other manager would have had to deal with everything that I’ve had to deal with in their whole career, never mind in five months. “But in a really strange way, I have thoroughly enjoyed it, I really have. No, I have, I have thoroughly enjoyed it. “I think I got softened up a little bit when Alan was here and Alan was taking a bit of abuse, and I think I got used to it, if you know what I mean. “It’s not a nice thing to accept, but I’m definitely a stronger person and better for it, without a shadow of a doubt, and whatever happens after Sunday, I’ll be better for it one way or the other. “If I had the chance again starting again, I would do exactly the same. I’d say, ‘Yes, I want this job. I’ll do it my way’. “I would just like to think that I would just have a little bit more rub of the green and a little bit more luck. “The one thing I have done, I have thrown every single minute of the day into this job. I have sacrificed so many different things. “I have sacrificed my family life, my social life – but I don’t mind that because I understood how big this job was. “But it’s very, very difficult when you are making all those sacrifices and taking the abuse you are taking. But I’d do it again.” Whatever happens on Sunday, there is little doubt that radical change will be required at a club which has lost the connection with large swathes of its support with critics denouncing a perceived lack of ambition. Newcastle recorded a profit of £18.7million and banked £34million during the last financial year while opting not to further strengthen the squad, and that has sparked a furious reaction. But for 90 minutes this weekend, all that will matter is edging over the finishing line, something a first win since February 28 – or at worst, matching the result achieved by 18th-placed Hull at home to Manchester United – will secure. Asked what his reaction would be if he kept the club in the top flight, Carver, who this week found himself at the centre of a fresh storm after being pictured smiling at a charity golf day, said: “It will be the second time I have smiled in a week – and obviously I got stick for smiling the first time.” The job has undoubtedly taken its toll on Pardew’s former number two, who freely admits his private and social lives have been affected with his wife noticing the change in him. He said: “She thinks I’m mad. But I think most managers’ wives think they are mad.” Nevertheless, asked if he would have any regrets on Sunday evening regardless of the outcome, he replied: “None whatsoever, none whatsoever.” last_img read more

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