Chris Panteli speaks to Anton van Nunen, the winner of GP's Decade of Distinction Award. Van Nunen is known across Europe as the father of fiduciary management and for his efforts in challenging the Dutch government on its pensions policy
Chris Panteli: What issues have had the biggest effect on the pensions industry during your career?
Anton van Nunen: The biggest influence during my time has come from regulation in Holland. It is really bad and has caused a lot of damage to the pensions sector. That is the reason I am very fond of the idea that we have reached a new pension view and this regulation can be... maybe not cancelled, but changed dramatically and that is a boon for the pension industry.
They are finally listening to the consideration that pension funds do have to cope with risk instead of, almost automatically, hedging it. A risk budget should be defined to balance risk and extra return. That message which I have been trying to get across has been backed by the OECD and is now finally also accepted in Holland, which is a good thing.
Chris Panteli: How will regulation change?
Anton van Nunen: The new pension deal between the social partners has not materialised yet but it is coming. It recognises that risk is an integral part of the pension business and funds should communicate risk to their members who can then decide how much risk the pension fund is allowed to take. Then we can get on with the job of managing risk instead of hedging it.
Up until now there has been a certain funding ratio pension funds have had to adhere to which is totally arbitrary and the calculation of which is simply wrong. On top of that, the funding ratio as such is an empty parameter, implying that the compass which pension funds should use as an indication of how healthy or unhealthy they are is a false one.
The other important development has been the evolution of fiduciary management. I set that in motion in 2001 and it has been a thunderstorm in Holland and is now spreading to the UK, Germany, Italy and some other countries. In the UK, different labels are sometimes used – implemented consulting or balance sheet management or whatever – but it is fiduciary management.
Chris Panteli: Where did the concept of fiduciary management come from?
Anton van Nunen: It was an assignment I got from an insurance company which said ‘we have an investment portfolio which is important to us and we need its returns in order to have competitive contributions. We do not have our own investment department but we have several managers working for us and we believe they are not doing the best job they can’.
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