EUROPE – Germany’s pension fund association, the aba, has called for national or European bodies to support the industry’s investment in infrastructure by assessing the risk associated with individual projects.
Responding to a report by the European Parliament’s committee on economic and monetary affairs (ECON) report examining the long-term financing of the Continent’s economy, the association said that bodies such as the European Investment Bank (EIB) could potentially support Germany’s occupational pensions (bAV) sector, as they so far had little experience of infrastructure investment and were unlikely to become experts in the “niche area” in the near term.
The position paper said: “The new assets in the field of long-term investment require more credit analysis and greater credit-analysis skills than existing assets, such as low-risk securities.”
Echoing PensionEurope’s own position paper on European Long-Term Investment Funds (ELTIF), the aba also said it would be helpful if the EIB stepped in and guaranteed certain projects.
The call comes shortly after asset manager Mirova suggested that fund managers behind ELTIFs should be bound by a ‘comply or explain’ approach on their socially responsible investment strategy.
The aba further called on the Parliament to accept that, if the European Commission were to introduce capital requirements for pension funds – as long proposed through the revised IORP Directive – it should also call for an investigation into the impact of the regulation on long-term investing, similar to the one underway to investigate the impact of Solvency II on insurers.
The association also reiterated its dislike of the financial transaction tax, saying it “should be avoided for the bAV sector in general – and not only in regard to long-term investments”.
“Reductions in the pensions payable in Germany of an estimated 3-8% as a result of the introduction of the proposed financial transaction tax are not acceptable,” it said.