Dutch pension funds with higher investment costs failed to outperform lower-cost peers last year, according to a study conducted by KAS Bank.KAS said it could find no direct correlation between management costs and absolute returns either.The bank drew its conclusions from its first cost benchmark survey, based on the quarterly reports of 40 small and medium-sized pension funds, with 1.2m participants in total, provided by regulator De Nederlandsche Bank (DNB).KAS said its benchmark study compared pension funds of comparable scale on such things as number of participants and liabilities, taking industry-wide schemes (BPFs), company pension funds (OPFs) and occupational pension funds into account. It also found that the administration costs per participant were significantly higher at company schemes than at industry-wide pension funds.Asset management costs were 11 basis points higher at OPFs than at BPFs, according to the custodian, which noted that this was 3bps higher than a recent DNB survey into the impact of scale had suggested.However, at the same time, the benchmark report confirmed that administration costs per participant at small and medium-sized schemes declined when the number of participants rose.Administration costs at OPFs were 2.7 times higher than at the usually much larger BPFs, KAS said.The bank concluded that the new pensions vehicle APF, which allows pension funds to co-operate whilst keeping their assets ring-fenced, would be important for cost-cutting.Actuarial consultant LCP, which looked at data from 2012-13, previously suggested there was no correlation between costs and investment results.However, it put the results into perspective by noting that the surveyed time frame was short term and did not take pension funds’ long-term investment horizon into account.Commenting on the findings, Robbin van Cadsand, risk and reporting project manager at KAS, said the custodian intended to extend its next survey back to 2013, 2014 and 2015 to better address pension funds’ long-term investment policies.He said KAS had assessed 20 schemes with €500m-1bn in assets and a similar number of pension funds with assets of more than €1bn.
The pension provider, which manages DKK380bn (€51bn) of assets, said its recommended medium-risk product produced a return of 7.5% for people with 15 years to retirement.In 2015, the non-guaranteed products Danica Balance and Danica Link was between 3.1% and 10.3%, depending on the age of customers.Svennesen explained that, in the new version of the Danica Balance product, it introduced a third “mix” fund, with medium risk and markedly more investment flexibility.“It gives us better opportunities to target investments to all customers regardless of the risk profile they choose, as well as providing a much more dynamic placement of our assets, and this is a big part of the reason we have had an attractive return in 2016,” he said.He said the high level of political, as well as financial market, turbulence last year had meant portfolios had to be adjusted continually.“And given this, we are satisfied the portfolios were not particularly affected by market swings but at the same time did produce good returns,” he said.The “mix” fund was first available to customers at the beginning of last year, after Danica Pension redesigned the basis of Danica Balance, its key unguaranteed market-rate pension product to allow it it to broaden the range of possible investment instruments.The company first talked about its new investment strategy of increasing direct investments in businesses in 2014.Danica Pension said increased its alternative investments further in 2016 – investments in unlisted equities or bonds.“We are focusing on these types of investment because they have the potential for high and attractive long-term returns in relation to the risk, and we have built up the necessary skills to be able to exploit our strong market position,” Svennesen said.He said direct investments had already borne fruit in Danica Pension’s market-rate product in 2016 with a return of more than 15%.The provider said it generated a high return on bond markets despite the low level of interest rates, thanks to falling interest rates and dynamic adjustment of the bond portfolio.Customers with low risk and 15 years to retirement received an average 6.6% return in 2016.Equity markets ended the year with good, positive returns, Danica said, but added that there had been a very wide variation in returns during the course of the year.“Tactical allocation throughout the year, as well as investments in alternative assets and direct lending to well-run Nordic businesses, helped create the good return,” it said.Customers with a high-risk level in their pension product and 15 years to retirement saw average returns of 8.6% last year. Danica Pension, Denmark’s second-biggest commercial pension provider, said it started to see the results of its new investment strategy showing through in 2016 investment returns, which it described as “satisfactory and attractive”.Reporting some early 2016 return figures, Danica Pension said customers with its market-rate products typically received a return of between 5.2% and 8.8% in 2016, depending on their risk profile in the lifecycle product Danica Balance.Anders Hjælmsø Svennesen, Danica Pension’s CIO, said: “We have delivered a satisfactory and attractive return at Danica Pension in 2016.“It is pleasing we have really started to see the results of the new strategy within investment, and that it has benefited our many customers in 2016 in the form of an attractive return.”
DES MOINES — A new report on the use and abuse of legal and illegal drugs in Iowa finds progress in some areas and a backslide in others.The 2020 Iowa Drug Control Strategy places Iowa 47th nationally in the rate of overall illicit drug use and 46th in drug overdose deaths.Dale Woolery, director of the Governor’s Office of Drug Control Policy, says alcohol, tobacco and methamphetamine still pose tremendous threats.“Binge drinking in Iowa is considerably above the national average,” Woolery says, “and while it doesn’t get talked about as much as opioid-related deaths, we have about three times as many alcohol-related deaths in the state of Iowa, at least in 2018, there were 616 alcohol-related deaths.”More than 10,000 Iowans were treated for meth use disorders this year, an all-time high. Among adults entering substance use treatment, the report says more cited meth as their primary drug. After rising steadily for over a decade, the report says the number of fatal opioid-related overdoses statewide fell by 32% last year — to 136 deaths.“We’re hopeful that we’ll continue to keep that down and go lower,” Woolery says. “We’ve seen a lot of positive changes in response to the opioid epidemic, getting more people into treatment, getting more people into recovery, prevention efforts have ramped up, more naloxone is available and being used to reverse overdoses.”The report says Iowa recorded the lowest number of cocaine-related prison admissions in at least 15 years during 2019.Marijuana remains one of the most commonly used illicit drugs in Iowa, accounting for more than 25% of all substance use disorder treatment admissions last year. Also, Woolery says marijuana-related hospital emergency department visits in Iowa rose 28% in the past two years.“One of the indicators that we look at that could be foretelling is the attitude of youth,” Woolery says. “Eleventh graders, for instance, and how they perceive marijuana, 23% say they see no risk to smoking marijuana once or more a week.”Nicotine and tobacco remain significant health threats in Iowa, according to the report. As the number of Iowa youth using tobacco has steadily fallen over the last decade, the 2018 Iowa Youth Survey says 23% of Iowa 11th graders reported using e-cigarettes in the past 30 days. E-cigarette use by Iowa 11th graders surpassed both alcohol and other drug use rates in 2018.