Nearly one-third of panellists said the investment rules they operate under are too restrictive and could prevent them from reaching their investment goals.
The survey results come as Italian pension watchdog group Covip called for a reform on pensions’ investment rules, with the objective of modernising the law regulating the investments pension funds are allowed to make.
Current rules on Italian pension funds’ investments date back ten years and are based on the “prudent person principle”, which effectively excludes investments in alternative and more risky assets, such as hedge funds.
We asked the Global Pensions 100 Panel whether they felt the investment rules they had to abide by limited their ability to reach their investment objectives. The vast majority of respondents (68.4%) answered negatively. But 31.6% felt legal restrictions on investments are an obstacle to performance and, more generally, how they operate.
Globally, there is a fear that a ripple effect of the financial crisis is that rules could be introduced limiting pensions funds’ investment choices. A typical example is the Alternative Investment Fund Managers directive currently discussed at the European level. Dutch pension funds have recently reiterated the concern this directive could have detrimental effects on their investment performance.
The Global Pensions 100 Panel was launched in July 2006 and every month asks pension funds two topical questions on events in the pensions industry. To join the 100 panel or for more information, contact: Raquel Pichardo-Allison on +44 (0)20 7968 4576, or email [email protected]
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