Month: September 2020

Domestic exposure of Dutch pension funds drops in 2014

first_imgThe 33 largest pension funds in the Netherlands had relatively less exposure to their domestic economy in 2014 than the precious year as a proportion of overall assets, although the overall value of Dutch assets increased.This is according to figures supplied by the supervisor, De Nederlandsche Bank (DNB), at the request of IPE’s sister publication Pensioen Pro.Investments in Dutch equity and fixed income (excluding liquidity) increased by €5bn overall to €100bn in total, most of which was attributable to Dutch government bonds, whose value in portfolios rose from €40bn at the end of 2013 to €47bn at the end of last year.Dutch mortgage holdings increased in overall value from €11.5bn to €13bn. Property investments dropped off from €21.5bn to €18bn.Despite the overall increase, the Dutch share of overall portfolio holdings decreased slightly from 13% to 11.5%.According to the DNB, the value assets in other geographical markets outpaced that of Dutch holdings.The figures are based on quarterly reports, in which the 33 largest funds are required to give a geographical breakdown of their holdings.This group represents around 80% of the invested assets of Dutch pension funds. In 2013, the supervisor reported that 14% of the assets of Dutch pension funds were invested in the Netherlands, although these data were based on a one-off survey among a sizeable group of funds and therefore not directly comparable with that now provided by the DNB.last_img read more

German pension fund association demands action on discount rate

first_imgGermany’s pension fund association (aba) has warned of an “urgent need for action” by the government on the discount rate that companies apply to their pension buffers. The discount rate is set to drop from just over 4% to less than 3% by 2017 unless an amendment to the German accounting standard HGB is passed in the coming weeks.If the rate falls, companies with on-balance-sheet pension obligations will have to pay an additional €35bn-45bn in total annually over the next three years to compensate.In a statement, the aba said: “This additional funding is a burden on the companies, reduces their capital buffers and credit ratings and fails to increase the security of workers’ pensions.” It said it feared companies would stop adjusting pension payouts to inflation due to the higher costs.This summer, a proposal was made to the government that would increase the calculation period for the discount rate from seven years to approximately 15.The proposal has “still not been assessed by the government”, the aba said.According to the association’s statistics, more than 40,000 German companies – small and medium-sized enterprises for the most part – will be affected by the drop in the discount rate.The aba argued that a change in the HGB discount-rate calculation would have no effect on capital markets, as some critics have argued.All listed companies have had to apply international pension accounting standard IAS19 with a lower discount rate for some time now.The association also claimed that a 15-year period for calculation was “not too high”, as the liabilities it is applied to have much longer maturities.Lastly, the aba said it would make more sense to replace the marked-to-market approach used in setting the discount rate for pensions in the HGB with a fixed rate set against future expectations for inflation and real rates.Otherwise, companies applying HGB may be hindered in their investments because of higher contributions to their pension plans for a “discount rate that is not real but merely a calculation aid”.For a more detailed discussion on the future of the HGB discount rate, see Peter König’s article in the November issue of IPE magazinelast_img read more

Belgian pension funds generate 5.7% in 2016

first_imgBelgian pension funds generated a nominal return of 5.7% on average last year, according to the Belgian sector organisation PensioPlus.However, the group warned that funds will have to increase their investments in the real economy in order to keep on generating sufficient returns.“Bonds are no longer a safe haven and are becoming increasingly volatile,” it said. Last year, Belgian pension funds allocated 45% of their assets to fixed income, with just 7% in alternatives and 6% in real estate.The 5.7% return compares to average gains of 4.4% and 11.1% over 2015 and 2014, PensioPlus said. The organisation drew its figures from 52 schemes with combined assets of €14.4bn. It added that returns had averaged more than 6.4% a year during the past 25 years.As well as the 45% in fixed income, Belgian pension funds had stakes of 39% in equity. The schemes’ holdings of cash were 4% on average, while the allocation to alternatives, such as insurance, infrastructure, private equity, and convertible bonds, totalled 7%.During the presentation of the preliminary figures, PensioPlus reiterated earlier warnings of the looming ‘devastating impact’ of the financial transaction tax (FTT) on Belgian pension funds.Philip Neyt, chairman of PensioPlus, called on the Belgian government to abandon the introduction of the so-called ‘Tobin tax’ if its rules were also to apply to non-commercial players such as pension funds.PensioPlus estimated that the FTT would cost Belgian pension funds €20m in direct expenses annually, but said that this amount would at least triple if the tax also applied to underlying investments.“This means that 5 to 24 months of pensions accrual during a worker’s entire career would be lost to the FTT,” it said.The lobbying organisation also reiterated that the introduction of the Tobin tax will scupper further relocation of pension funds to Belgium and that existing pan-European schemes may even leave.Currently, there are approximately 80 cross-border pension funds in Belgium.PensioPlus further warned that pension funds in countries that don’t participate in the FTT, including the Netherlands and Luxembourg, are also to suffer from the tax if they invest through a Belgian investment vehicle.The ministers of the ten European member states that are considering to adopt the Tobin tax are to meet on Friday to discuss the subject.last_img read more

‘Meaningful’ risk of no deal outcome to Brexit negotiations: survey

first_imgThere is a “meaningful” risk that Brexit negotiations will be unsuccessful, but pension schemes should be able to gauge this and react to the likely outcome, according to BMO Global Asset Management.In the asset manager’s latest quarterly liability-driven investment (LDI) survey it asked investment bank derivative traders for their views on the probability that the UK and the European Union would fail to reach a deal on the former’s departure from the EU within the two year timeframe for negotiations.The average view on the probability of a “no deal” outcome was around 40%, although views were spread across a range of 5%-100%, according to the asset manager.It said this emphasised how much uncertainty there was in the market. Rosa Fenwick, LDI portfolio manager at BMO Global Asset Management, said: “The risks of the UK failing to get a deal within the two-year window are meaningful.“A transitional deal may be agreed but, given the political atmosphere, it is unlikely to morph into a permanent solution. The progress of the negotiations should be fairly well signposted though, giving time for pension schemes to react to the likely reality.”Pension schemes could mitigate risks in several ways, she said.One response could be to diversify risk assets away from the UK and Europe, and increase or accelerate hedging to reduce the volatility of liabilities.A weakening of sterling could be positive for pension funds holding overseas assets, she said.Pension schemes could also consider downside or tail-risk protection while it is available at relatively attractive prices, Fenwick added.The asset manager’s LDI survey found that absolute hedging appetite fell over the second quarter of 2017. It attributed this to the surprise outcome of the UK election in June and a lack of index-linked Gilts available.Total interest liability hedging activity fell by 18% to around £24.5bn (€26.9bn), while inflation hedging activity by 14% to around £21.3bn.The majority of the quarter’s activity was in hedging using bonds either outright or by switching out of swaps, according to Fenwick.last_img read more

FRC finds support for stewardship code to mirror section 172 duty

first_imgThe UK’s accounting and audit regulator has highlighted support for new stewardship requirements for investors similar to those currently imposed on company directors.Respondents to a recent Financial Reporting Council (FRC) consultation supported modifying the UK stewardship code to include a duty for investors similar to section 172 of the UK Companies Act.The accounting watchdog is due to present a revised stewardship code for public consultation later this year, but asked for views on some initial questions when it consulted on amendments to the corporate governance code in December.The FRC floated the idea of a “section 172 for asset managers”. Under this part of the UK’s Companies Act 2006, directors have a duty to promote the success of a company for the benefit of shareholders, but in doing so they must have regard to a number of other factors and stakeholders, including employees. Reporting on feedback to both consultations yesterday, the FRC said the majority of respondents were in favour of the stewardship code mirroring at least some elements of the code for listed companies.“Many respondents were in favour of including a similar duty for investors as exists under section 172 of the Companies Act for directors,” the FRC reported.The revised corporate governance code, which was unveiled yesterday, asks boards to describe how they have considered the interests of stakeholders when performing this duty – or to explain why they haven’t done so.The FRC said there was support for stewardship code signatories to report on how they had considered a wide range of stakeholders in their own organisations, their investment process, and the companies in which they invest.There was support for strengthening the definition of the purpose of stewardship and for including issues such as culture and diversity and workforce matters within the code.However, many respondents were wary about the code including a prescribed list of environmental, social and corporate governance (ESG) issues to be monitored and acted on.The FRC said: “There was a broad preference for the stewardship code to encourage a focus on material long-term issues, or to require a description of how investments and stewardship approaches align with clients’ long-term interests, as a useful way of encouraging signatories to consider ESG issues, without being too prescriptive.”Stewardship by bondholdersA majority of respondents also felt it would be helpful to have clearer expectations of the stewardship roles and responsibilities of those “at different points in the investment chain”, the FRC reported.Many respondents called for specific attention to be paid to the role of proxy advisers.The current stewardship code, which was last reviewed in 2012, is primarily concerned with the role of investors as shareholders in publicly listed companies. According to the FRC, however, there was broad agreement among respondents that “including an increased range of asset classes… would be helpful, with fixed income assets being the most frequently cited as appropriate for inclusion”.There were 109 responses to the December 2017 consultation questions on the stewardship code. A breakdown by type of respondent was not provided.The UK stewardship code is aimed at fund managers, pension fund trustees and other asset owners and can also be used by service providers.The FRC recently appointed a 17-strong committee of investors to help inform its future work on issues such as corporate governance and stewardship.last_img read more

People moves: ATP names chief risk officer; Bfinance hires from Railpen

first_imgBfinance – The investment consultancy has hired Sweta Chattopadhyay to lead its private equity advice practice. Chattopadhyay was most recently a senior investment manager at RPMI Railpen, the in-house manager for the UK’s £27bn (€30bn) railways pension scheme, where she was responsible for leading private equity and debt investments and formulating investment strategy. She was also involved in building the scheme’s co-investment programme.Before joining Railpen, Chattopadhyay worked at private equity firm Adveq, the Universities Superannuation Scheme, and ABN Amro.Bfinance said its private markets advice arm had expanded significantly in recent years in response to “the increasing control and sophistication sought by investors in their private equity investment strategies, including greater use of co-investments and direct investments”.Pensionskasse des Kantons Schwyz (PKS) – Viktor Reichmuth, head of the CHF2.2bn (€1.9bn) pension fund for the canton of Schwyz in central Switzerland, will retire at the beginning of October. Reichmuth joined PKS in 1989. The pension fund has initiated the process to appoint a successor, it said today.   Partners Group  – The €67bn private markets manager has announced that David Layton will succeed Christoph Rubeli  as co-chief executive officer on 1 January 2019. Layton will join co-CEO André Frei, who has held the role alongside Rubeli since 2013. Layton is currently head of private equity at Partners Group, where he has worked since 2005. He helped develop Partners’ direct private equity business and established its regional headquarters for the Americas in Denver in the US.Rubeli joined Partners in 1998 from UBS and helped build the Swiss company’s global investment business, particularly in Asia. Upon stepping down from the co-CEO role and the executive committee, he will continue at the company as a partner with the intention of growing the company’s global business.Amundi – Europe’s biggest asset manager has appointed David Harte as CEO of its Irish business. His new role is in addition to his existing responsibilities as deputy head of Amundi’s operations, services and technology division.Harte joined Amundi last year as part of its acquisition of Pioneer Investments, where he was global chief operating officer. Prior to joining Pioneer in 2003 he was COO at Bear Stearns in Dublin.Aon Denmark – Jesper Ejsing has been hired by Aon Denmark as senior risk management consultant within the consultancy’s enterprise risk management business. Ejsing, who began his career at Aon Denmark in 1997, has since worked for various companies including Vestas, DHL Nordic and FLSmidth. Aon said the expansion of the specialist team was part of its strategy to “be a leader in insurance, risk management, retirement and health”.Cardano – Advisory firm Cardano has appointed Roel Mehlkopf as a pension fund adviser in its client servicing and advice division, effective from October. He joins from pensions supervisor De Nederlandsche Bank where he is a senior policy adviser.Prior to this, Mehlkopf was senior policy adviser at the Netherlands’ ministry of social affairs, advising former state secretary Jetta Klijnsma on updates to the financial assessment framework and legislation to introduce drawdown pensions.Mehlkopf started his career at the Netherlands’ Bureau for Economic Policy Analysis as a project leader for the analysis of generational effects of previous pensions agreements. When he join Cardano he will remain affiliated with Tilburg University, where he is a part-time lecturer and a researcher for pensions think-tank Netspar.Dufas – Iris van de Looij is to take over as director at Dufas, the Dutch industry organisation for asset managers, investment institutions and custodians. She has been a co-director since April alongside from Hans Janssen Daalen, who is to leave later this year.Van de Looij has more than 20 years of experience in investment, gained in management positions at Dutch banks MeesPierson and KBL European Private Bankers. As a consultant, she has supported several organisations in implementing the second Markets in Financial Instruments Directive.Public Sector Pension Investment Board – Eduard van Gelderen has started as chief investment officer at Canada’s CAD153bn (€101.2bn) Public Sector Pension Investment Board as of 1 August. He left his job as senior managing director of the €91bn investment management group of the University of California after less than a year in the role.Until August last year, Van Gelderen was chief executive of the €470bn Dutch asset manager APG. His previous roles include deputy CIO at ING Investment Management, CIO at NIB Capital Asset Management, director of fixed income at M&G, managing director of fixed income at ABP Investments and marketing director at Cardano Risk Management.Societe Generale – David Abitbol is to take over as the new head of Societe Generale Securities Services (SGSS) on 1 January 2019. He will succeed Bruno Prigent, who is to retire after 38 years with the French banking giant.Abitbol is currently chief operating officer for Societe Generale’s Asian operations, based in Hong Kong. He will relocate to Paris for his new role. He has worked for SocGen since 1992. ATP, Bfinance, PKS, Partners Group, Amundi, Aon Denmark, Cardano, Dufas, PSP Investment Board, Societe GeneraleATP – Kim Kehlet Johansen has been appointed as the new chief risk officer at Denmark’s largest pension fund ATP. He replaces Mads Smith Hansen who has decided to leave the fund in order to take a career break.Kehlet Johansen has worked at SEB Pension – previously Codan Pension – for the last 21 years, most recently as mathematical director. SEB Pension in Denmark was sold to Danica Pension in June.Smith Hansen has been working at ATP for just over two years, and his responsibilities have included the ATP’s Lifelong Pension product as well as risk management at the organisation.last_img read more

Polish parliament gives auto-enrolment law the go-ahead

first_imgPoland’s auto-enrolled employee pension plans (PPKs) passed their first legislative hurdle on last week after politicians in the country’s lower house of parliament voted in favour of the bill.The lower house, known as the Sejm, voted the government’s bill through by 229 in favour to 197 against, with two abstentions. The bill now needs approval from the Senate (the upper house) and president Andrzej Duda.If it is passed, the law will come into effect on 1 January 2019, with the first tranche of enrolment – for large private companies with at least 250 employees – starting on 1 July.Auto-enrolment will subsequently be implemented for other tranches of companies in six-month intervals, with the final deadline – for small private companies with fewer than 20 workers, as well as all state-owned companies – set for January 2021. The system is obligatory for employers and voluntary for employees. Workers up to age 55 years will be automatically enrolled with the option to opt out, while workers aged 55-70 can choose to opt in.The government is aiming for a 75% participation rate – some 11.4m by the end of the last enrolment phase.Employers will contribute a minimum 1.5% of gross salary and employees 2%, with the option to increase this by a further 2.5% and 2% respectively.In order to reduce the burden on those earning lower wages, the law has scaled down the basic employee contribution rate for workers earning less than 120% of the minimum wage to a minimum 0.5%.In all cases the state will contribute a “welcome” bonus of PLN250 (€58), and an annual subsidy of PLN240.The government estimated that, by the end of 2027, the total value of accumulated PPK assets could range from PLN138bn, with the minimum 3.5% contribution, to as much as PLN294bn with the maximum 8% contribution.Stakeholders back reforms Wawel Castle in Krakow, PolandAccording to a recent survey conducted for the Polish Insurance Association, 66% of respondents assessed the new system positively and 22.2% were negative.The most appealing feature was that PPKs were deemed private, inheritable funds, the survey found – particularly significant after the previous Polish government transferred sovereign bond assets held in second-pillar funds to the first pillar in 2014, prompting legal action from some savers.Respondents to the insurance association’s survey were also positive about the voluntary nature of the schemes, and subsidies from employers and the state.The range of providers, initially limited to investment fund companies, was expanded to include open pension fund managers (PTEs), insurance companies, and managers running existing employee pension funds (PFEs), all with at least three years’ relevant experience.Mariusz Wnuk, vice president and chief investment officer of the Pocztylion-Arka PTE, said his firm would be offering PPKs.“Our company has managed an open pension fund for 20 years since the beginning of the second pillar reform, and PPKs are very close to the idea of a second pillar,” he said. “As a matter of fact, they seem to be better designed as an important part of our pension system and capital market.”Each PPK provider will have to offer at least four funds or sub-funds with investment strategies tailored to the age of the participants. OFEs, in contrast, can only provide one portfolio, with no exposure to Polish government bonds.Both PPKs and OFEs are subject to a cap on investment in foreign assets of 30%.Wnuk added: “The PPK act will regulate eligible asset classes, investments and allocation limits for different age groups. On the other hand, [permitted] allocation differences will reach 30%, which gives us space for discretionary decisions.“Our first view on investment strategies is to use the legal limits and guidelines to build core portfolios and use more active strategies the younger the members are.”Participants will be able to access their fund for retirement purposes after age 60, with the option to take 25% as a lump sum.The remaining 75% is paid out in a minimum 120 monthly instalments, or a shorter period but with the penalty of capital gains tax.Members can also access 25% of their fund should they or a dependant fall ill. Participants can also tap their fund for a short-term loan to build or purchase a house or flat.last_img read more

IPE Conference: How Ireland’s sovereign fund will invest from 2019

first_imgThe sovereign fund would also increase its investments in developments related to climate change, including renewable energy. Credit: Patrick FrostEugene O’Callaghan, director, Ireland Strategic Investment FundIn January this year ISIF partnered with German energy firm Capital Stage to invest in Irish wind farms, and last month it committed €50m as a cornerstone investment backing “Ireland’s first dedicated renewable energy development equity fund”.The fund would also look at which sectors of the Irish economy could be adversely affected by the UK’s exit from the European Union. “But as all this is still a bit of a mystery, we’re sort of ready,” said O’Callaghan.The ISIF would continue its programme of strengthening the position of Irish companies through direct investments, O’Callaghan said. This year the fund has invested roughly €257m into Irish businesses either directly or via funds.From his experiences over the past five years, O’Callaghan highlighted the importance of “avoiding crowding out the private sector” in these investments.“There is no point in a public strategic investment fund investing in opportunities in which the private sector is already more than willing to invest,” he said.Another “key feature” of ISIF was its willingness to co-invest, O’Callaghan said, as “smaller domestic investors or overseas investors are very confident when ISIF is the lead investor”. Some of the ISIF’s recent investmentsIrish sovereign fund backs $400m genomics research projectIreland’s sovereign fund partners with World Bank for emerging marketsWhiskey business: Irish SWF backs ‘fastest growing spirits sector’Irish and Chinese sovereign funds partner for €150m tech fundIreland’s SWF backs AI cybersecurity firm with €10m investment The €8.9bn Ireland Strategic Investment Fund (ISIF) has been given five priority investment themes following a review by the country’s finance ministry.Addressing IPE’s annual conference in Dublin last week, Eugene O’Callaghan, director of the ISIF, said the fund’s remit would change from next year , as Ireland’s economy had recovered from the financial crisis and high unemployment had been addressed.“The fund will now serve more sustainable long-term needs of economy rather than the short-term needs from five years ago,” O’Callaghan said.Among its five priorities, the ISIF has been tasked with promoting regional development to counterbalance the dominant position of Dublin, and investing in housing, as there was still a major shortage of affordable accommodation in the country.last_img read more

Asset manager body hails engagement effect on CEO pay

first_imgThe High Pay Centre and CIPD found that the higher a CEO’s pay, the less support the remuneration report got from shareholdersIn their report, however, they said that shareholder ‘say on pay’ – shareholders’ right to vote on companies’ future remuneration policy at least once every three years – seemingly had “little effect on restraining top pay”.This was on the basis that, between 2014 and 2018, every FTSE 100 company pay policy put to a vote at an annual general meeting was passed, and in 2018 most remuneration packages were voted through with support of 90% or more of shareholders.Some companies have sought investors’ views on executive pay before deciding on a policy or outcome in a bid to avoid significant opposition.According to the High Pay Centre/CIPD report, there was a strong negative correlation (-0.59) between votes for the remuneration report and total pay for CEOs – known as “single figure pay” – meaning that the higher the pay, the less support for the remuneration report.They added that the correlation between CEO pay and votes for the remuneration report was negligible when CEO pay was between £1m and £4m.“At the same time,” the report continued, “our findings do suggest that shareholder pressure is a relevant factor in pay awards.“Companies that award higher levels of pay are more likely to face higher levels of shareholder dissent, resulting in negative publicity for the company and individual directors”High Pay Centre/CIPD “Companies that award higher levels of pay are more likely to face higher levels of shareholder dissent, resulting in negative publicity both for the whole company and for individual directors.“This is likely to be a consideration, even if not an overriding one, for remuneration committees in making pay awards.”The report also reported a “weak relationship” between pay and votes on the pay policy, which in the CIPD’s view “supports the argument that CEO pay packages are too complex – not even shareholders in the company know what the policies will result in”.Luke Hildyard, director at the High Pay Centre, said: “There is still more to be done to align pay practices with the interests of wider society and give the public confidence that our biggest businesses are working for the good of the economy as a whole rather than the enrichment of a few people at the top.” Credit: Steve BuissinneLess money was awarded through long-term incentive plans last year, the report foundIn a press release, they said the fall in CEO pay was likely to be due to a combination of factors. These included less money being awarded through long-term incentive plans due to variable corporate performance, and the cyclical nature of payouts.There was also the “the possibility of greater restraint on high pay, which is to be welcomed”, the organisations said.The report followed a similar study by Deloitte, which put the size of the FTSE 100 CEO median package at £3.4m (€3.7m), down from £4m. The figures are largely in line with those from the CIPD and the High Pay Centre.According to Deloitte, around one third of FTSE 100 companies had reduced pensions for new executive hires. Although fewer of companies met with “low votes”, shareholder support for executive pay at FTSE 250 companies fell to its lowest in five years.Stephen Cahill, vice chairman at Deloitte, said: “It has been a quieter AGM season for the largest companies, with fewer shareholder revolts. However, investors have shown that they will continue to bite when companies fall foul of their expectations on pay.”Resolutions supported by fewer than 80% of the votes cast are considered by a number of bodies in the UK as having met with significant shareholder dissent. Investor pressure weighedThe High Pay Centre and CIPD also sought to gauge the relationship between executive pay and shareholder influence. The UK’s revised corporate governance code includes a new provision that pension contribution rates for executive directors should be aligned with those available to the wider workforce. The IA made executive pension packages a focus ahead of this year’s annual general meeting season.  FTSE 100 CEO pay down to £3.5m According to the High Pay Centre and CIPD report, median and average pay packages for chief executives of the top UK-listed companies fell 13% and 16%, respectively, between 2017 and last year.center_img The body representing the UK’s asset management industry has hailed a fall in CEO pay as “a welcome sign” that companies are beginning to listen to investor concerns.The Investment Association (IA) was commenting on a new report on FTSE 100 pay published today by the High Pay Centre and CIPD, the human resources professional body.Andrew Ninian, director of stewardship and corporate governance at the IA, said: “Shareholders play a key role in helping to drive change on executive pay and engage throughout the year with companies and their directors who set pay to make sure it reflects investor priorities.“That engagement is clearly working, as in 2019 more than 50 companies have promised to cut their executive pensions because of a campaign by shareholders , while the increased number of votes against individual directors show that shareholders will hold them to account if a company’s approach to pay is unacceptable.”last_img read more

German state pension remains confident for the future despite pandemic

first_imgThe coronavirus pandemic had only a limited impact on the statutory pension scheme, according to DVR. Employees that received benefits during short-time work, and unemployment benefit contributions, Arbeitslosengeld I, continued to pay into the statutory pension scheme.In addition, employers are paying additional contributions based on 80% of earnings lost due to short-time work.The reserve at Deutsche Rentenversicherung should be gradually reduced to keep contribution rates stable during a phase of demographic changes, the spokesperson added.Reserves are primarily used for cushioning fluctuations during the year, particularly of income from contributions.The statutory pension scheme started 2020 in good financial shape, said Bund Alexander Gunkel, the chair of DRV’s federal board, at the institution’s general assembly in June.At the time, Gunkel said the DRV estimated a deficit of around €4.3bn and reserves to significantly decrease by the end of 2020 to €36.5bn.According to financial forecasts before the pandemic, the contribution rate to pension insurance contracts was expected to be stable until 2024.However, the economic consequences of the coronavirus pandemic have shown that reserves reduced at a faster rate than expected, Gunkel added.According to forecasts, the contribution rate will remain constant at 20.6% in 2021, up until 2024 in order to potentially reach 20% by 2025, he added.To read the digital edition of IPE’s latest magazine click here. Deutsche Rentenversicherung (DRV), the administrator of Germany’s state pension scheme, has remained confident for the fund’s future performance despite uncertainties caused by the COVID-19 pandemic.DRV has a sufficiently large buffer to cover pension payments in any case, a spokesperson said, adding that it expects financial reserves to increase to around €38bn at the end of 2020.Financial reserves decreased in the first five months of 2020, from €40.4bn in January to €36.9bn in May, but it recorded an uptick to €37.2bn in June.Liquidity declined this year from €42.6bn in January to €39.1bn in May, but shot up again in June to €39.4bn, according to the latest figures published by DRV.last_img read more