​Collective defined contribution: It’s about commitment

first_imgCon Keating, head of research at BrightonRock Group, considers the ‘main’ advantage of the CDC modelAt the TUC’s recent ‘ABCs of CDC’ conference, my good friend Bernard Casey of Warwick University asked a question of Gregg McClymont, the shadow pensions minister, as to the sources of the superior projected performance of collective defined contribution (CDC) over individual DC. The question was whether different speakers have emphasised the “main” advantage of CDC. One said it reduced volatility. Another said it generated higher returns because it allowed investing long term, and in higher-risk assets, and a third said it generated better returns because, via scale economies, costs were lower. Which is it?”The answer, of course, is all and none – all are sources, but the dominant one in practice will vary with circumstances. In the various model projections that were undertaken – by the Government Actuaries Department, by Aon Hewitt and by the Royal Society of Arts – the detail of the model construction and calibration will have determined the answer. In fact, as the order in which effects are considered in an attribution analysis determines their magnitude, the question of a unique most important source is not even well framed.Bernard’s question and its target were a piece of pure devilment, of which I might have been proud myself. The various projections are all concerned with scale and scope in pension management. However, there is a more important aspect to CDC as a form of organisation. We have known since the work of Teresa Ghilarducci that the form of organisation can have effects upon the broad economy. Here, empirical work on US data showed that individual DC is more procyclical that collective defined benefit, exacerbating economic downturns and heightening booms. The driver of this analytic result was rather more the collective risk-sharing of DB than the pooling aspect – most individual DC assets are invested in collective mutual funds. At the conference, Steve Webb, the UK pensions minister, repeatedly emphasised the risk-pooling face of CDC to the point that the audience might have thought risk-sharing among members in a CDC scheme was entirely absent. It isn’t – well-designed CDC schemes are both risk-sharing and risk-pooling. CDC schemes allow greater commitment, in both amount and over time, than individual DC, even after considering the collective nature of DC investment funds. The key insight here is that it is commitment that allows our industrialists and entrepreneurs to create further wealth. Simply put, greater commitment can be expected to deliver greater wealth, a larger pie from which pensions may be delivered.There are a number of approaches to the analysis of commitment. We might have used Claude Shannon’s 1948 work on information theory in combination with Georgescu-Roegen’s 1971 “The entropy law and the economic process”, but that is perhaps too abstract for pensions practitioners. It would, though, deliver the insights that, although all wealth is information, not all information is wealth, and that commitment is ineluctably related to irreversibility.Colin Mayer recently wrote an excellent book ‘Firm Commitment: Why the corporation is failing us and how to restore trust’, which offers a corporate finance perspective on these issues, but more directly relevant is Pankaj Gehmawat’s 1991 ‘Commitment: The dynamic of strategy’. From Colin Mayer, we may note the relation between trust and commitment; from Gehmawat, we may distinguish between strategy and tactics, and by extension between investment and speculation. The irreversible nature of commitment, or trust, makes it risky. Indeed, the analysis may be expanded to consider soft and hard commitments, the value of flexibility as an option, and decisions that are, rather than absolutely irreversible, merely costly to reverse, which is the problem more usually faced by investment managers.Several analysts have purported to address empirically the question of whether CDC schemes do, in fact, invest more for the longer term or are more committed. They suggest that conservative asset allocations are observed. However, there are two problems with these studies. First, the data are derived from legacy Dutch DB schemes that many have wrongly rebranded as CDC, and second – and more important – these schemes are subject to a strict regime of risk-based regulation (FTK), as if their liabilities were hard promises.Solvency ratios are the heart of this FTK regulation, and, simply to calculate a solvency ratio, it is necessary to attribute an estimate to liabilities. Indeed, the Dutch regulator has required cuts in pensions in payment. Against this background, it is perfectly sensible to maintain conservative, low-volatility asset allocation strategies. As we are still to see the detail of the UK CDC regulation, we should bear in mind this caution when thinking about that.Many commentators have questioned the sustainability of CDC. “If I am a young employee, why should I join a scheme that is already in deficit?” is one way this is usually put. It is not clear how potential members become aware of a possible shortfall or indeed if that concept has any meaning given the absence of hard pension promises.The reality is that younger members face far more risk and uncertainty than older members – and the magnitude of that risk and uncertainty can be estimated from the high relative cost of buying deferred annuities for that group. They also need to consider their alternatives – if the investment performance of their individual DC choices is as much lower than CDC, as the various projections suggest, the deficit in a CDC scheme would have to be substantial indeed to offer worse potential outcomes and warrant non-participation. Finally, as this article has pointed out, if these employees do not participate, they are facing a future that is, by their own making, less rich and satisfying.Con Keating is head of research at BrightonRock Grouplast_img read more

Friday Night Lights

first_imgI know we are not in Texas, but nevertheless high school football returns tonight.  The stadiums in Indiana may not be as large as those in Texas but get out and fill them to root on your favorite team.  It is hard not to enjoy the late summer and fall nights with home football games.  Besides the teams on the field, you have cheerleaders and band performances.  The price of admission is low and most schools in this area are supposed to put a very good product on the field.  Go home town!last_img read more

Culvert replacements to close S.R. 101 in Ripley County Tuesday and Wednesday

first_imgMilan, IN— INDOT maintenance crews will close two sections of S.R. 101 in Ripley County next week for culvert replacements. S.R. 101 will close on Tuesday, October 29, between C.R. 50 S. and C.R. 50 N., south of Milan, and on Wednesday, October 30, between C.R. 1000 N. and C.R. 1100 N. near Sunman, weather permitting. Work is scheduled for 8 a.m. to 5 p.m. each day.Access to homes within the closure will be maintained. Thru traffic should utilize the official detour routes listed below.Tuesday, October 29 (S.R. 101 closed between C.R. 50 S. and C.R. 50 N.): U.S. 50 to S.R. 129 to S.R. 350Wednesday, October 30 (S.R. 101 closed between C.R. 1000 N. and C.R. 1100 N.): S.R. 46 to S.R. 129 to S.R. 48last_img read more

EPL: Hammers attack Saints

first_imgRelatedPosts Lampard: I still have confidence in Tomori Ighalo: My best moment as ‘Red Devil’ Mane double eases Liverpool to win over 10-man Chelsea West Ham vs. Southampton Venue: London Stadium Kick off: 4PMWest Ham United face Southampton at the London Stadium this afternoon knowing that a point could move the club out of the Premier League relegation zone. While David Moyes would have been encouraged by his side’s performance against Liverpool on Monday night, West Ham have now gone eight matches without success in all competitions. The Hammers have had to contend with some difficult matches, including a double-header with the leaders and last year’s champions Manchester City, but the pressure has only increased with the club in the bottom three. One win would change the mood at the London Stadium, especially this weekend when victory would take the club outside of the drop zone courtesy of Aston Villa competing in the EFL Cup final. However, making that a reality is easier said than done, and Moyes will need to find a solution to their frailties at the back before expecting his side to make progress up the standings. Individual mistakes have cost West Ham throughout the campaign, an issue which must be rectified if the East Londoners are to benefit from any improvements made at the other end of the pitch. From Southampton’s perspective, they will welcome the opportunity to face a struggling West Ham side after getting back on track with victory over Villa last weekend. The Saints dominated from start to finish at St Mary’s, although they only confirmed the three points through a break-away goal from Stuart Armstrong during the final seconds. Ralph Hasenhuttl’s side were under pressure to gain a result, with defeat having the potential to leave them involved in a relegation battle after successive setbacks to Liverpool and Burnley. The biggest plus from their most recent win was not having to rely on a goal from the free-scoring Danny Ings, who has netted 15 of the club’s 34 strikes in the top flight this season. Meanwhile, the Saints make the trip to England’s capital sitting 10 points above the bottom three and the same margin behind fourth-placed Chelsea. West Ham United possible XI: Fabianski, Ngakia, Diop, Ogbonna, Cresswell, Noble, Rice, Snodgrass, Fornals, Anderson, Antonio. Southampton possible XI: McCarthy, Valery, Stephens, Bednarek, Bertrand, Armstrong, Ward-Prowse, Hojbjerg, Djenepo, Long, Ings.Tags: David MoyesLiverpoolManchester CityPremier LeagueSouthamptonWest Ham Unitedlast_img read more

Jarvis eyeing England call-up

first_img Jarvis, who made his only England appearance against Ghana in 2011, does not want to be the forgotten man. “Every team has competition for places and we have a very strong competition. Hopefully it will bring the best out of everyone and if we can get people watching here we can try and push for England places as well,” he said. “I would love to get back in there with England. I just have to make sure I play well for West Ham.” Allardyce is excited by the attacking and creative options he has assembled this season. Jarvis, Downing, Joe Cole, Ricardo Vaz Te and Ravel Morrison are all competing for the chance to supply strikers Carroll and Modibo Maiga. Hodgson confirmed that Morrison is on the England Under-21 radar after hearing positive reports about his impressive pre-season contribution for West Ham. Allardyce believes this could be a breakthrough campaign for Morrison, who describes himself as a “changed man” from the teenager who found himself in trouble with the police and the Football Association. When Allardyce signed Morrison from Manchester United in January 2011, he was confident of getting the best from a midfielder who was highly-rated by Sir Alex Ferguson. But the 27-year-old must first win his battle for a regular place at Upton Park following the arrival of Stewart Downing, another left winger eyeing an England recall. Sam Allardyce is convinced that national manager Roy Hodgson will be at Upton Park this season, monitoring the progress of Downing and Andy Carroll ahead of a potential World Cup campaign. Press Association Allardyce felt moving Morrison away from Manchester would help and the 20-year-old has impressed the Hammers boss since returning from his loan spell with Birmingham last year. “He does seem to have matured,” Allardyce told the Evening Standard. “He’s obviously taken a good look at himself and decided that, if he is going to make it as a professional footballer, he needed to be more disciplined in his day-to-day life.” Morrison’s big challenge will be to prove he can cut it in the maelstrom of the Premier League. “His contribution in pre-season has been exciting for us. His big challenge will be when he gets his chance to play in the first team at competitive level,” Allardyce said. “When the whistle goes on Saturday it is 100mph from the start. “He will have to learn to cope with that but he is really promising and hopefully we look forward to him continuing to develop into a player who will play a part in the first team. “We will give him the chance if he continues to do the things he is doing and discipline himself.” West Ham winger Matt Jarvis is determined to force his way back into the England set-up so he does not go down in the record books as a one-cap wonder.last_img read more

BCCI given one day to implement recommendations

first_img(ESPNCricinfo) – The BCCI has been asked by the Supreme Court to give an undertaking by Friday, October 7 (today), that it will “unconditionally” implement all the court-approved recommendations of the Lodha Committee. If the board failed to provide such an undertaking, the Supreme Court indicated it would pass an order today to replace the board’s office-bearers with a panel of administrators.The court asked the BCCI’s legal counsel Kapil Sibal to check with the board and respond by today. It is understood that Sibal had asked for more time but the court refused.“What do you want?” TS Thakur, the Chief Justice of India and head of the three-judge bench hearing the matter, said. “Either we pass orders tomorrow or you give us a statement that you will abide unconditionally by the recommendations and directions of the Lodha Committee.”The latest developments in the tussle between the BCCI and the Lodha Committee took place in the Supreme Court yesterday.The court was hearing the BCCI’s response to the status report filed by the Lodha Committee last week, which recommended that the BCCI office-bearers be superseded because they were impeding the implementation of the recommendations passed by a Supreme Court order on July 18.There was a dramatic turn of events towards the final half-hour of the hearing. Sibal’s argument that the BCCI needed approval from two-thirds of its member associations, according to the Tamil Nadu Societies Act under which the board was incorporated received sharp response from Chief Justice Thakur.Thakur said the BCCI had been the “face” and “forefront” of defiance against the Lodha Committee’s recommendations. “You are giving the lead to the associations,” he said. “You are trying to obstruct the Lodha panel.” His suggestion to the BCCI in response to its members’ resistance was to either block their funding or to debar them.At that point, Thakur gave the BCCI an ultimatum: agree to push through the recommendations, agree to discuss with the Lodha panel and “stop wasting our time”.The BCCI then asked for time until October 17, keeping in mind that the court will take a 11-day break next week, but the request was denied.Sibal was asked whether he could give the BCCI’s undertaking of acceptance by today, and when he said it was not possible because the board needed approval from its state associations, he was told: If you don’t implement the recommendations, we will pass the orders.”Justice Thakur reminded the BCCI and the state associations that their money was public money. He warned that funds would be stopped to states that did not want to accept the Lodha Committee’s recommendations.When Sibal said the state associations had their own by-laws and the BCCI had no control over them, the court said: “If the associations are reluctant to reform, why do you continue to give them money? You are giving crores of money to them even as they refuse to reform?”At the start of the hearing yesterday, the court heard submissions made by the amicus curiae Gopal Subramanium. If it were to approve the Lodha Committee’s recommendation to supersede the BCCI office-bearers, the court asked Subramanium, would there be eligibility criteria for the people comprising the panel of administrators, and whether they needed to be cricketers? He said there were no criteria as long as the new administrators were of impeccable stature and integrity.The court was also told that ICC chief executive David Richardson had said the BCCI president Anurag Thakur had asked the ICC for a letter saying it would not allow any government nominee on the BCCI Apex Council.The Lodha Committee had recommended that one official from the Comptroller and Auditor General’s office be part of the nine-member Apex Council, which would replace the existing BCCI working committee.last_img read more

‘Softball in a new dispensation’ bowls off today

first_img– 18 games billed for today DUBBED ‘softball in a new dispensation’, the Prime Minister’s T20 Softball Cup bowls off today, with 18 games across various venues in Georgetown.Six games will be played in the Masters’ category while 12 games are slated for the All Stars division.For the All Stars fixture, six games are billed for the Everest Cricket Club ground, while two games each are scheduled for the YMCA, Demerara Cricket Club (DCC) and the Malteenoes Cricket Club (MSC) grounds.For the 09:30hrs games at Everest; Success will play Speedboat (Pitch 1), Spartan opposes Regal (Pitch 2), and Dutch 4 Warriors take on Hillfoot (Pitch 3).At YMCA, SVC of New York play Farm X1 (Pitch 1) while DeHoop will battle Queens All Stars of New York. The final game for the morning session will see Ross Kill playing Boots at Malteenoes.In the afternoon session which is set to commence at 13:00hrs, a similar amount of games are scheduled to be played, with Spartan taking on Speedboat, Dutch 4 Warriors playing Regal and Success battling Hillfoot. Those three games are billed for Everest on Pitch 1, 2 and 3 respectively.Over at YMCA, SVC will battle Boots while DeHoop and Farm X1 play each other at DCC. Ross Kill and Queens will match skills at Malteenoes.Meanwhile, in the Masters’ category, two games each will be played at DCC, Malteenoes and GNIC.In the morning from 9:30hrs; Amazon is set to play Enterprise at DCC; Regal opposes HS Masters at Maltenooes and NY Hustlers take on Tropical Spring at GNIC.In the afternoon, Amazon will play Tropical Spring at DCC, Regal battle Enterprise at Malteenoes and NY Hustlers oppose HS Masters at GNIC.The three-day tournament continues tomorrow and concludes on Sunday, with the final to be played at Everest, where $600 000 will be up for grabs in the Open category, while the Masters will vie for the winners’ purse of $500, 000. Both categories will have a runners-up prize of $100,000 as well as trophies.Lighted bails will be used in the competition and added entertainment will be provided by the Crossover band and cheerleaders during the finals.The tournament is being played in collaboration with the National Sports Commission.last_img read more

Badger players take shot at coaching

first_imgLUKAS KEAPPROTA/Herald photoThere aresome who can learn from words on a page, and there are those who learn bydoing.Forsophomore setter Nikki Klingsporn and senior outside hitter Morgan Salow,learning to coach is best done by the latter.Startinglast winter and continuing through the summer, both Salow and Klingsporncoached for Capital Volleyball Academy in Madison. The program, run byWisconsin volunteer assistant coach Dave Bayer, is in its second year and has225 players, the most in the area.Eventhough the program is only in its second year, it already has had prominentWisconsin alumni as coaches. Last year, All-American setter Jackie Simpson wasan assistant coach and has moved on to the staff of the volleyball team atWinona State this season. Also, former Badger Angie Sanger, who graduated in2003, coaches the program’s 17 Elite team. Before the season, Bayer offered coachingpositions to all the current members of the Wisconsin volleyball team. That’swhen Salow and Klingsporn stepped up.“I thinkit’s great when our players get out in the community and coach teams,” UW head volleyballcoach Pete Waite said. “It’s great because they are role models for theyoung athletes. It is also good for them to have an eye of a coach on the courtwhen they become players again back on the court for us. You know coaches areon the sidelines just like the fans, and it always seems so easy from thesidelines. But then, you have to be able to verbalize to the athletes how toaccomplish something.”During lastyear’s club season, Salow was an assistant coach on the club’s 17 Elite and 18Elite teams. With both squads, she traveled across the nation to differenttournaments, finding success in many. At the AAU National Championships inOrlando, Fla., both of her teams finished in the top ten, and at the JVDAChampionship in Louisville, Ky., the 17 Elite team finished third.Thesuccess of her teams made the summer a little more easygoing.“It’s somuch fun because the girls have fun, and they love going to practice and lovebeing there,” Salow said. “Also, you have fun. It’s just an all around happyatmosphere. They work hard, they compete and it was an all-around lot of fun.”ForKlingsporn, coaching is in her blood. Her father, Mark, is the head coach ofOakdale Tartan High School in Oakdale, Minn. Both her dad and her mother, whoplayed volleyball at North Dakota State, have helped her become a solid playerand now a coach.“Myparents have always coached me. So I took what they taught me and brought it tomy team,” Klingsporn said. “I think that has helped a lot because I do want tobe a coach when I get older.”For anyclub team, there are several advantages of having current, younger players onthe team. One, Waite said, is it helps bridge the generational gap between theyounger players and the older coaches. He said because the student coaches andthe players are so close in age, it makes it easier for them to bond and givesthem a mutual respect for each other. The studentcoaches also help the players understand what they are going through and thededication it takes to make it to the collegiate level.“Beingthrough it before, they can kind of see into the future in terms of what thesegirls have to do to prepare to get to the level where they’re at or even gobeyond where they are at,” Bayer said. “I think that’s the beauty of havingBadger players as coaches. They are actually playing at a level our players aretrying to get to.”Having agood connection with the players also gives potential recruits a positive imageof what playing at Wisconsin is really like. Although the players are not therefor recruiting purposes, it still helps when possible prospects not only seehow the UW program works but gain an understanding what it takes to make it ina major college program. “It givesthe local players a flavor of what it’s like to be a Badger player because I’msure they talk about road trips and our coaching staff,” Waite said. “I knowtheir sole purpose is to get into coaching, to get their feet a little wet andsee if it is something they want to do in the future.”Althoughboth players did not do any recruiting while coaching, they still gave theprogram a good enough name to attract some youngsters. Kelli Kasha and KirbyToon, whose father is former Wisconsin wide receiver Al Toon, are going to playfor the Wisconsin volleyball team next fall. Both Kasha and Toon played onSalow’s team, though she was not the deciding factor for either of the girls toplay for the Badgers.For theplayers, coaching also has some personal perks. During tournaments, both Salowand Klingsporn had the opportunity to talk to the many coaches who attended theclub matches looking for recruits. These connections help them network forfuture coaching jobs they will be looking for.Inpractice, coaching during the off-season gives the players a differentperspective of the game. They understand what coaches are going through everyday and the tough work they put in to make sure the team runs smoothly.“Nikki hasactually made numerous comments to me from time to time,” Bayer said. “Evenlast year during the spring, she understands the game better now after coachingand being around other club coaches. She has a much better appreciation forwhat Pete and (assistant coaches) Colleen (Bayer) and Brian (Heffernan)and myself do for the Badgers day in and day out.”Also, thecoaches have said both Salow and Klingsporn’s understanding of the game has improved.They have begun to notice many of the minute details of the game and the thingsthey can do to make sure their game is perfect.“Theirvolleyball IQ and their sports IQ went up. You have to analyze entiresituations; you can’t just focus on yourself or one position,” Waite said. “Youhave to look at everyone around you and how they flow together. Their statsimproved and their mindset as a team player.”last_img read more

Police Craves Return to Past Glory  in SportsÂ

first_imgFollowing the outstanding performance at the just concluded Oosom Games (One Man One Medal) the Nigeria Police have started serious plans to return to the glorious days in sports through the construction of an ultra-modern sport complex.The Nigerian team topped the just concluded event with 213 medals; 108 gold, 68 silver and 37 bronze medals  to emerge the overall best at the event that was attended by the military and paramilitary organisations in the country.According to Deputy Commissioner of Police, Aliyu Abubakar, the ground breaking ceremony for the new complex would come up on the 21st of the month.The Inspector General of Police, Idris Ibrahim has already given his blessing for the complex and the President of the Nigeria Polo Federation, Francis Ogboro, who is playing a key role in the project said the complex would no doubt add value to the image of the police as an institution.It is also believed that police recent exploits in various sports like the 2017 World Police Games in America where the Nigeria won five gold five silver and two bronze despite attending the games for the first time and one gold and five silver feat at the recently held Governor Wike National Wresting Championship in Port Harcourt no doubt projected the image of the institution to use sport as a means of projecting the body.Nigeria Police force as over the years produced great sports men like Samuel Peters in boxing, late Sunday Bada in athletics, Yeiya Yellow, Olanrewaju Durodola and the recently promoted Assistant Commissioner of Police, Chioma Ajunma, who still holds the record as the only woman to win an individual Olympic gold medal for Nigeria till date.Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegramlast_img read more