Looming trade war fears ‘hurt Dutch scheme funding levels’

first_imgGrowing fears of a trade war between the US and China hurt the funding levels of Dutch pension schemes in March, according to Mercer and Aon Hewitt.The consultancies largely attributed a significant funding drop to the knock-on effects of US president Donald Trump’s protectionist measures.Using different assumptions, the two firms concluded that the coverage ratio had dropped by at least two percentage points on average to 108% at best.Frank Driessen, chief executive at Aon Retirement & Investment, cited “significant uncertainties on equity markets with growing worries about trade conflicts and announced strikes”. President Trump has levied tariffs on Chinese products, prompting retaliation from BeijingMercer credited sliding equity markets as well as falling interest rates for pension funds’ declining funding.It noted that the 30-year swap rate – the main criterion for discounting liabilities – had decreased by 13 basis points to 1.48% in March, while the MSCI AC World Index had dropped 3%.Aon concluded that, as a result of the declining interest rates, pension funds’ liabilities had risen by approximately 2.5% on average.It added that schemes’ assets had increased by 0.3%, as the positive effect of falling interest rates on fixed income portfolios had outstripped the losses on their equity holdings.Mercer estimated that euro-denominated government bonds had risen 1.6% and that listed real estate had improved 3.6%.“Although pension funds are in much better shape than a year ago, the recent developments highlight how vulnerable schemes’ recovery is,” said Driessen.He added that recent figures indicated that larger pension schemes’ funding was still short of the required level of 104%, and that these schemes would suffer most from the funding drop.“Rights discounts are still possible,” Driessen said.Both consultancies concluded that Dutch pension funds’ “policy funding ratio” – the average coverage of the previous 12 months, and the main criterion for rights cuts and indexation – stood at 108% on average at March-end, with Aon noting an increase of 1 percentage point.However, if the monthly funding levels continued to drop, the policy funding ratio would also decrease during the course of this year. Mercer also mentioned “a possible trade war” as well as recent “dovish” remarks made by European Central Bank (ECB) president Mario Draghi, who said that the ECB would not raise interest rates “until far beyond the end of its quantative easing programme”.Aon saw a funding fall of two percentage points on average, whereas Mercer found a drop of three percentage points, taking coverage ratios down to 107% on average.last_img read more


first_imgHUNDREDS of people travelled from all over the county today to Buncrana to protest at the ongoing Government austerity programme ahead of this week’s budget and heard a local TD talk of the ’empty chairs’ at Christmas due to mass emigration.Donegal North East Sinn Féin TD, Pádraig Mac Lochlainn said that the large turnout sent “a clear message to the three Government Oireachtas members in Donegal to take to their Fine Gael and Labour colleagues in Government; Inishowen and Donegal says no to further cuts and austerity.”Deputy Mac Lochlainn said: “The deep concern in Inishowen and Donegal about further cuts is palpable. Already huge numbers of our workforce are unemployed and thousands of mostly young people have emigrated across the county. “Many chairs will be empty at the dinner tables of Donegal homes this Christmas.“In our fully costed pre budget submission, Sinn Féin have proved that there is a better way. We have to stop strangling our own people at every budget to pay the debts of reckless international gamblers.”He went on: “Here in Inishowen, we now hear talk of garda stations closing in Malin and Culdaff, beds being lost at Buncrana Nursing Unit and Carndonagh Community Hospital, and the vital NowDoc service being downgraded. We also have seen funding removed from our schools, student grants slashed and more education costs pushed onto hard pressed families.“At some stage, this madness has to stop. How much damage will be done to our community, public and physical infrastructure before this Government realise that the well has long since dried up. How much of the life our people will they sqeeze before they stand up against this profound injustice that forces our people to pay for the recklessness and unbridled greed of global capitalism that gambled on private Irish banks like Anglo. All the rules of the game have been torn up. This is sheer madness and not one international economist can understand it. “You can not grow an economy and create jobs and new taxes while imposing crushing cuts and austerity year after year after year. This approach has failed dramatically yet our Government will stand up and tell the troika of the EU/ ECB/ and IMF that it has to stop. In particular, we have to stand up to the ECB.”He added: “Future generations will ask us what we did about it. Today’s protest shows that the people of Inishowen fought back and said no more.”‘THOUSANDS OF FAMILIES WITH EMPTY CHAIRS AT CHRISTMAS’ TD TELLS PROTEST was last modified: December 4th, 2011 by BrendaShare 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:buncranaprotestlast_img read more