​Swedish Pensions Agency says special funds too costly for premium pension

first_imgOverall, however, the agency said it supported the 860-page proposal published in November.“We believe that the proposal for a procured fund marketplace will contribute to higher quality and lower costs for pension savers and pensioners,” it said, adding that having a smaller number of funds would simplify choices for pension savers.However, it disagreed with the proposed division of responsibilities between itself and AP7, which is to be given more tasks and change its name to the ‘Authority for the Premium Pension Fund Management’.The agency – which is currently responsible for the whole area of pension choice within Sweden’s general or state pension, which includes the premium pension – said putting the new authority in charge of designing the choice architecture for the new premium pension would make the development work very difficult.“For these reasons, we recommend that the responsibility be pooled at the Pensions Agency and reject the proposal to transfer responsibility for the choice architecture to the new authority,” it said.It also rejected the choice architecture’s proposed design, saying it had not been tested on pension savers.As for the idea of AP7 being in charge of setting requirements for fund trading and fund information, the agency said that it would hamper its ability to take operational responsibility for these two areas.“For this reason, today’s fund agreement should be replaced by two supplementary fund agreements, which each authority enters into with the fund manager,” it said.However, the Swedish Pensions Agency was on board with the principle of giving AP7 extra duties rather than forming and entirely new authority for the premium pension.Separately, in another consultation response published on the Ministry of Finance’s website, the Swedish House of Finance (SHOF), a financial research centre at the Stockholm School of Economics, questioned the whole notion of freedom of choice in the premium pension system. In the debate over the future of the Swedish premium pension system, a key government agency has spoken out against the inclusion of “special funds” – a Swedish category of alternative investment fund that includes hedge funds – on the platform offering investment options to pension savers, saying to do so would be too costly.In its consultation response to the sweeping changes being proposed to the first pillar defined contribution (DC) system, the Swedish Pensions Agency (Pensionsmyndigheten) said: “Allowing special funds with weekly trading and valuation would cause pension savers significant costs from building up support for this in the system, without providing corresponding benefits.”While special funds are not allowed onto the current platform – the funds marketplace (fondtorget) which is to be replaced by a more selective procured set of options under the reform plan – the proposal says it should also be possible to procure special funds and foreign equivalents of such vehicles for the funds marketplace.But the pensions agency rejected the idea, saying the new procurement rules for funds should be designed to work together with the agency’s mutual fund model and its need for daily valuation and trading. “A conflict of interests would arise if the authority should both run its own fund that competes with the funds in the marketplace, and at the same time select and monitor its competitors”Swedish House of Finance (SHOF)The proposal contained little information, it said, about why the new premium pension system should be governed by the principle of freedom of choice. But that at the same time, the think tank argued, this principle was being used to justify the very existence of a procured fund marketplace.“We find it problematic that the principle of freedom of choice is justified on the basis of its intrinsic value,” said SHOF.“If the sole purpose of the principle of freedom is to give individuals the opportunity to choose for themselves, it should be sufficient to offer savers a number of state-managed alternatives,” it said.The financial research centre also saw “a big problem” in the idea of having the fund marketplace managed by AP7.“A conflict of interests would arise if the authority should both run its own fund that competes with the funds in the marketplace, and at the same time select and monitor its competitors,” it said, adding that this became especially problematic when the procurement criteria were partly discretionary, and the decision on the number of funds was delegated.Political risk would grow, it said, as AP7’s default option within the system grew – an expansion that it said was likely to happen because the new regime would lead to more and more pension capital falling into the fund.“There is a risk that when the fund’s mission is broadened to include funds marketplace management, it will also be easier for future politicians to influence the fund’s investment strategy, which would be very problematic,” the institute said.last_img read more

Read More →

Community restaurant closes after 48 years

first_img“We try to give the best services we possibly can,” Rodas said. “I think we did well while we were here, but what happened was beyond our control.” “We’re not like fast food restaurants. You can actually sit down, be served,” Rodas said. “From what I hear, [customers are] all saying, ‘Where are we going to eat now?’ because around here there’s no other restaurant like this.” Rodas said even though Grinder was closing and the employees were losing their jobs, they were optimistic that things would get better.   “The service staff is very patient and kind,” Diaz said. “It’s almost like family … You don’t feel like you’re being rushed or in a hurry. That’s what I enjoy about [Grinder].” Waitress Mercedes Ortiz has been working at Grinder for 32 years and was devastated to hear about its closing because she has a sentimental attachment to the place.  On Sunday, the diner — that has served the area for 48 years and is the last remaining location of the Grinder chain — will close its doors. “People have come here [to] celebrate birthdays, celebrate graduation [and] celebrate the life achievements,” Rodas said. “A lot of generations of USC students have come through here.” Rodas, who has been working at Grinder for 29 years, said many customers who first visited as USC students years ago now bring their kids. He added that what he’ll miss most about his time at Grinder is the relationships he has built with the customers.  An old-fashioned, homey dining room and traditional American menu have attracted generations of students to grab a seat at the counter of the Grinder restaurant near campus.  “It reminds me of a lot of the places that I grew up going to by the beach with my dad, it’s got that very homey feel,” Martin said. “I went with a bunch of my friends, so I associate going there with the memories I share with them.” “I recall this street, Figueroa, was just an automobile row, just cars, empty parking spaces,” Diaz said. “When the Olympics came, they got spruced up, but the Grinder was here earlier than that, 10 years earlier. For us, people who don’t drive, it was a step up for us, so finally we [had] a fancy restaurant.” For many long-time customers living nearby, Grinder’s closing means they will lose the only sit-down, full-service restaurant within walking distance, as fast food restaurants such as McDonald’s and Panda Express populate most of Figueroa Street, Rodas said. Assistant manager Carlos Rodas said the land from Figueroa Street to Flower Street north of West 28th Street, including the Grinder and Taco Bell properties, was sold to a developer, but that he did not know the new owner or the future of the property. Employees received two weeks’ notice of the diner’s closing on Feb. 16.  Grinder is popular among USC students because of its proximity to the campus and the 20% discount for USC students. Grinder serves a full menu of breakfast, lunch and dinner all day in order to provide more options for customers.  Grinder’s closing will mean that workers will soon find themselves unemployed. Grinder has many long-time employees who treat the restaurant not only as their job but also as a family, Rodas said.  Diaz, who dines at Grinder once a week, said she enjoys meeting friends in the cozy diner where she has gotten to know many employees over the years. Taylor Martin, a sophomore majoring in international relations and global business, said dining at Grinder reminds him of his parents cooking up pancakes at home, since the service makes him comfortable and relaxed. “It’s frustrating because [Grinder’s closing] is not because of what we do here or performance — it is something beyond our control,” Rodas said. “We have to basically get out and go find another job.” “It felt more home-like, and the service is very good,” Bravo said. “After a few times of coming, the servers generally know you, and they treat you like part of the family.” “We don’t own the land, so the land was sold,” Rodas said. “Whoever bought the land wants us out since they want to develop the land.” “I love the Grinder, this is like my second house, being here all day, every day,” Ortiz said. “I was young when I started working here … I was sad to hear that the owner is going to close the restaurant.” (Beatrice Gao | Daily Trojan) Pat Diaz, a long-time customer at Grinder who lives nearby, said she loves the diner for its reasonable prices and proximity to her home since she is unable to drive. She recounted how Grinder had survived for decades and benefited the community. Danny Bravo, another resident living in the neighborhood, has been coming to the diner on weekends with his family since he was a kid. “One door closes, one door opens, so something positive has to come to us,” Rodas said. “Right now it’s maybe because our judgment is a little cloudy and our vision is cloudy, but that clears up as time moves on.”last_img read more

Read More →