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COG
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EFES Discussion |
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[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index] Re: EFES: Re: State of the Union
For your information: Inspired by the AFL-CIO Institute for Working Capital, the Crocus Institute for Labour Capital (Winnipeg) and SHARE (Vancouver) five European co-operative insurance companies are forming an institute to do research on pension fund managent, to educate trade union pension fund trustees and to instigate discussion on pension fund managment. This institute will be called the Euresa Institute and it will be located in Paris. The inauguration will be the last days in March in Stockholm. The European Trade Union Confederation will have a seat on the board of the institute. This is really a concrete result of the COG conference in Washington in 2002, as the idea was brought over to Europe via that conference. I have also written a book which will be published to mark the inauguration of the institute, called The People's Capital. It should be noted that contribution defined pension systems can be a great tool for labour if they are properly designed and managed. The problem is of course that these systems seldom are. Here in Sweden we have a mixed system. 16% of the sum of wages is designated to pensions for the retired generation. 2,5% is by law put into a contribution defined system where the individual can choose to put his money into any five out of 600 funds. For workers covered by a union contract (about 80% of the labour force) 3,5% of the wage sum is put into pension funds by individual choice. The number of funds is more limited in this negotiated part of the pension system. The start of the system was not very well thought out, and there are lots of things to be learned by both successes and failures. One of the successes is that the labour movement created a pension fund of its own, with features that should be of great interest to pension fund managers and designers of pension systems world wide. Some of them are: Low fees - presently 0,4% of the capital for actively managed funds An investment policy which is still under development, aiming to maximize the returns for the individual retiree rather than maximizing the returns on the funds. An easily understood fund structure, with "fund packages" related to risk and age, making it clear to people who are new to the investment market that it is OK to take high risks when you are young, but that they should be limited when you get closer to retirement. An active ownership policy, which will grow more important as the funds grow. Folksam-LO Pension, as the company is called, has now been active since 1998. Their national funds have got top grades in independent assessments. Folksam has been declared the best manager of bonds four out of the past seven years, and the management of national stock funds has been awarded third and second place the last two years. Now we are looking at ways of channelling some of these immense funds to the local economies where the worker-investors earn their money. We try to learn from the US, Canada, Italy, Spain and the UK, where we have found some very interesting schemes. To me it seems that success in local investment is dependent on how strong a "social contract" you can get. Local risk, local responsibility and limited funds seem to be key. I hope the Euresa Institute will be an active partner in the global discussion on pension systems and on how to manage ordinary people's money. Per Ahlstrom 2005-02-04 kl. 14.04 skrev Marc Mathieu: Thank you very much for this.
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