Pension savers have much to gain from Capital Markets Union, says NAPF
14 May 2015
But policies must be looked at through the lens of pension funds
The National Association of Pension Funds (NAPF) has today (Thursday) confirmed its strong support for the European Commission’s proposals for a Capital Markets Union (CMU), in its response to the EC Green Paper: Building a Capital Markets Union.
James Walsh, Policy Lead for EU and International, NAPF, commented:
“The NAPF is fully supportive of the EC’s vision of a Capital Markets Union and believes pension funds, and their members, have much to gain from a CMU that makes it easier to invest for the long-term and across national borders.
“It’s essential, however, that the EU recognises the key role pension funds play as major institutional investors. If the CMU project is to succeed it is vital that the investment opportunities provided by governments or the EC offer the kind of risks and returns pension funds need to meet their liabilities to pay pensions. Policies must be looked at through the lens of pension funds.
“Policy-makers must also ensure that all aspects of EU policy are aligned with the Capital Markets Union. The NAPF is concerned that the ‘Holistic Balance Sheet’, currently being developed by EIOPA, would force pension funds to move even further into low-risk short-term asset classes such as government bonds – at the expense of investment in equities and other long-term growth-generating assets.”
Mike Weston, Chief Executive, Pensions Infrastructure Platform (PiP), commented:
“Pension funds are looking for long-term index-linked returns which are most easily secured in a stable investment environment.
“Policy makers at both a national and EU level should look to ensure a stable regulatory and fiscal framework to encourage infrastructure investment. This would include providing a clear pipeline of future infrastructure investment opportunities, to give pension funds the confidence to build due diligence resources and to ensure the necessary funds are available when investment is sought.”
EC Green Paper Building a Capital Markets Union: a response by the National Association of Pension Funds can be read in full on the NAPF website.
Notes to editors:
The NAPF is the voice of workplace pensions in the UK. We speak for over 1,300 pension schemes that provide pensions for over 17 million people and have more than £900 billion of assets. We also have 400 members from businesses supporting the pensions sector.
We aim to help everyone get more out of their retirement savings. To do this we spread best practice among our members, challenge regulation where it adds more cost than benefit and promote policies that add value for savers.
Pensions Infrastructure Platform (PiP)
PiP is the infrastructure business being developed by pension funds for pension funds, aligned to the long-term interests of the UK pension funds who will be its main investors. Profits and benefits created will be reinvested for the benefit of all PiP investors. This is the first time UK pension funds have combined to create such a financial entity in the UK. Key features of the PiP are:
- Target size of £2bn
- Low fees, c50bps
- Low risk, PiP is expected to invest at the low-risk end of the infrastructure asset spectrum
- Long-term cash returns of RPI+2-5% (i.e. as a liability match)
PiP Limited is a company limited by guarantee, which is presently wholly owned by National Association of Pension Funds Limited (NAPF Ltd).
Pensions Infrastructure Platform Limited is an appointed representative of Hutchinson Lilley Investments LLP which is authorised and regulated by the Financial Conduct Authority.
Lucy Grubb, Head of Media and PR, NAPF, 020 7601 1726 or 07713 073023, [email protected]
Eleanor Bennett, PR Manager, NAPF, 020 7601 1718 or 07825 171 446, [email protected]