Revised FTK will provide ‘clear rules’ on indexation, reduce contribution volatility

first_imgTo keep salary costs stable for employers, and maintain purchasing power of participants, the new FTK would provide for a steady cost-covering contribution, based on the 10-year average of interest rates, or on estimated returns, Klijnsma said.However, a pension fund which picked the latter option would be required to include the costs of indexation in their premiums.The new FTK will also include steering instruments to limit pension funds’ exposure to daily changing discount rates, said the state secretary. For example, schemes would be allowed to use 12-month average rate to calculate of their coverage ratio.In addition, the Cabinet would discuss with the pensions sector how defined contribution plans could also be enabled to share risks collectively, she made clear. Klijnsma added that that Cabinet would start a broad dialogue with society about the long-term future of the pensions system. As part of the process, the Social and Economic Council (SER) would be requested to advise on the future of additional pensions. The Pensions Federation welcomed the FTK proposals, as it would decrease volatility of funding and would allow to more evenly distribute the impact of market shocks on pension benefits.However, it voiced concerns about the way the FTK is to balance the approach across generations.The envisaged rules, based on macro calculations, could turn out to be unbalanced for individual pension funds, it argued, underlining that a balance between the generations must be based on an overall solution, rather than on a single element in a pension plan.In its opinion, individual pension funds should be allowed to take their own decisions, based on their specific characteristics.The Federation further called for solutions to limit the volatility of the current risk-free discount rate, a source of instability to the pension system over the course of the last few years.In a joint statement, supervisors DNB and AFM cited increased shock resistance, stability, transparency and balance of the pension system, as the most important improvements in the proposed new FTK rules.However, they expressed disappointment that the option of cushioning premium levels based on estimated returns remained. They noted the uncertainly of achieving expected returns and argued that this could affect pension benefits.In their opinion, the approach was at odds with the benefit-based contract of the defined benefit schemes that still dominated in the Netherlands.Both supervisors urged Klijnsma to focus on a quick introduction of the new FTK, and indicated that they were confident that pension funds would be able to cope with a short implementation period. The new rules are scheduled to come into force as on 1 January 2015.In a preliminary response, the €300bn civil service scheme ABP noted that the new FTK proposals hardly offered opportunities to achieve its indexation target. “The new contract looks like a stricter version of the current nominal one,” it said.Peter Borgdorff, director of the €137bn healthcare scheme PFZW added: “Compared with previous proposals, the current ones are an improvement, but they are not sufficient yet.”“For example, it is stil unclear whether we will be allowed to invest as we think is necessary for the pensions we want to provide,”  he said.Also in a joint statement, the lobbying organisations for the elderly associations (CSO) and pensioners’ associations (KNVG) said they were afraid that the new rules would limit indexation.They called for an additional pension contract, that would allow pension funds to invest actively in order to increase the chances of indexation, while offering less certainty for future pensions.CSO and KNVG also underlined the importance of the same discount rate being applied for both pension contributions and liabilities. The new Dutch financial assessment framework (FTK) is to provide “clear rules” for dividing up indexation of pensions between younger and older workers to prevent disproportionate redistribution between the generations, the Dutch ministry of Social Affairs has announced. As a consequence, any potential windfall would not be able to redistributed immediately, the ministry said in a clarification of the FTK proposals. The proposals have now been put to the Council of State (RvS) for a legal assessment, before being presented to Parliament and fully published.According to Jetta Klijnsma, the secretary of state for Social Affairs, financial shocks or rising life expectancy, must trigger immediate rights cuts, but these may be spread out over a 10-year period, to avoid sudden discounts.She said that under the new rules, pension funds must also clarify in advance any measures to be taken in case of a big funding drop.last_img read more

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Indian PM describes Nelson Mandela as shining beacon of democracy

first_imgIndian Prime Minister Narendra Modi on Saturday described South Africa’s anti-apartheid icon Nelson Mandela as a “shining beacon of democracy”.“Remembering the apostle of peace, a shining beacon of democracy and a champion of equality, the beloved Madiba on Nelson Mandela Day,” Modi said.The Indian prime minister was paying tribute to the late South African president on the occasion of his birth anniversary.Mandela’s birthday on July 18 was declared by the United Nations in 2009 as Nelson Mandela International Day in recognition of his contribution to peace and freedom.last_img read more

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In Stay Order Saga: NEC Cites Threat to Supreme Court Bench

first_imgOne of the lawyers representing the National Elections Commission (NEC) yesterday, during an oral argument, openly alleged that those Liberians who are opposing the holding of the Special Senatorial Election were interested in unseating the Full Bench of the Supreme Court.“If you were to accept their petition and halt the holding of the December 16 Special Senatorial Election, all of you Justices will be losing your respective jobs, because there will be a change of government,” Cllr. Theophilus Gould emphasized during eight (8) hours of intense deliberation on whether not or to lift the stay order and allow the NEC to conduct its planned election.“Their action is beyond the Ebola crisis.  They are opting for an interim government; this is their motive and you have to stop them from doing so. They must be stopped now and immediately,” Cllr. Gould further stressed.However, in counter argument, Cllr. Laveli Supuwood told the court that they were not interested in the establishment of an interim government, but they were interested in the violation of the constitution by the NEC and the National Legislature basing their arguments on Article 86 (a, b)  and Article 88 of the 1986 Constitution of Liberia.In their ruling, Chief Justice Francis S. Korkpor declared that “the High Court Judges will go into their robbing room and, as soon as possible, we would indicate which way we will go. Matter is suspended.”Before the argument and subsequent reservation of its ruling, the Justice in Chamber, Associate Justice Philip A.Z. Banks on November 28 placed a stay order on all elections activities, after two political parties and eminent citizens, including Blamo Nelson, former minister of Interior Affairs, Emmanuel Bowier, former information minister in the regime of former President Samuel K. Doe, as well as civil society asked him to do so.But, addressing the Full Bench at the Temple of Justice, Cllr. Gould reminded them that those individuals were opting for a Liberian conference, where they would call for an interim government, if the election fails to take place.“They are interim government specialists; they are former government officials who want to see the setting of a transitional government, where they would have a part to play,” the NEC lawyer further alleged.He went on to say that the ex-officials were protesting against the election so that the government can declare a vacancy at the House of Senate and subsequently a by-election can take place.Delving into the Ebola crisis, Cllr. Gould clarified that NEC has put every mechanism into place to protect the spread and transmission of the virus, “NEC has put into place hand washing, temperature taking among other measures during the election and the campaigning process.”The Ebola Virus Disease (EVD) was one of the major issues. The petitioners (complainants) were asking for the postponement of the December 16 election.In counter argument, Cllr. Laveli Supuwood told the court that they were not interested in the establishment of interim government, but they were interested in the violation of the constitution by the NEC and the National Legislature basing their arguments on Article 86 (a, b) and Article 88 of the 1986 Constitution of LiberiaArticle 86  (a states that “the President may, in consultation with the Speaker of the House of Representatives and the President Pro-Tempore of the Senate, proclaim and declare the existence of a state of emergency in the Republic or any part thereof. Acting pursuant thereto, the President may suspend or effect certain rights, freedom and guarantees contained in this constitution and exercise such other emergency power as may be necessary and appropriate to take care of the emergency, subject, however, to the limitations, contained in this chapter.”  Also 86 (b) states that “the state of emergency may be declared only where there is threat or outbreak of war or where there is civil unrest affecting the existence, security or wellbeing of the republic amounting to a clear and present danger.”Article 88 also  states that  “The president shall immediately  upon the declaration of a state of emergency, but not later than seven days , thereafter lay before the Legislature its regular session at a  specifically convened session, the facts and circumstance leading o such declaration.”It further states that “the legislature shall within seventy-two hours, by joint resolution either by two-thirds of the membership of each house, decide whether the proclamation of a state of emergency is justified or whether the measures taken thereunder are appropriate.  If the two-thirds vote is not attained, the emergency shall automatically be revoked.  Where the Legislature shall deem it necessary to invoke the state of emergency or to modify the measure taken there under, the president shall accordingly and immediately carryout the decision of the Legislature.”In their argument, Cllr. Supuwood said, the Articles do not allot any power to the National Legislature to set election date contrary to the Legislature’s action to set the December 18 date for the holding of the Special  Senatorial Election, which they alleged is a violation of the constitution. “There is no provision in these articles that say the Legislature should set election date, it gives the President the right to suspend or affect any rights and not the legislature. They are only there to approve the declaration of a state of emergency,” he added, “if there is any constitutional crisis like this one, it is the people who have the right to set a new date and not the Legislature.”Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)last_img read more

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