Protecting the credit union tax status, the need for regulatory relief and data security were the topics of discussions with policymakers across Capitol Hill this week, as credit union leagues from 5 states participated in Hike the Hill. Credit unions from Connecticut, Iowa, Maine, Pennsylvania and Vermont met with members of Congress, as well as federal agencies, during their time in Washington, D.C.“Our main message was about the credit union tax status and how it’s core to our business model,” said Justin Hupfer, CEO of PolicyWorks. “We wanted to make sure legislators are aware that the benefits of our tax treatment end up with our members, who save $110 million per year in Iowa.”Before their day of meetings, Connecticut’s credit unions enjoyed a welcome session at Credit Union House with CUNA President/CEO Jim Nussle.Once on the Hill, credit unions asked for support of the tax status, support for the Residential Loan Parity Act, support for any proposals that would impose data security standards on merchants and discussed the effect on consumers of the Equifax breach with their congressional delegation. When meeting with the NCUA, credit union leaders had a discussion about the long-term outlook on the Share Insurance Fund. 9SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr continue reading »
Germany’s financial regulator has permitted two Pensionskassen to cut their reserve funds to enable them to implement funding recovery plans.The €475m Pensionskasse for the catholic aid organisation Caritas and the €345m Kölner Pensionskasse have made cuts to their actuarial reserves of almost 20%.BaFin moved to close both funds for new business a year ago – the first time it had taken such a step – citing a severe lack of funding.After “intense negotiations”, as one insider put it, the Pensionskassen and their board members have announced a “comprehensive recovery plan”, according to statements from the two funds. For the Caritas Pensionskasse, the recovery plan measures include a 19.9% cut in its actuarial reserve, defined as the present value of future liabilities minus expected contributions. BaFin’s office in FrankfurtAt the Kölner Pensionskasse, which has a significantly younger membership structure, the cut was just over 12%.The actual pension cut for each individual contract still has to be calculated in detail.For the Caritas Pensionskasse the amount necessary to cover both the existing deficit as well as costs for the recovery was calculated to be €146.6m, while the Kölner Pensionskasse required €62.5m.Both Pensionskassen stated that these amounts were “covered by the agreed cuts in future payouts, the offsetting of assets as well as the loss reserves”.No more details are being given out to the public at the moment, according to one source with knowledge of Caritas’ situation.The websites for the two pension funds state that their annual reports 2017 are “to be published shortly”, after being approved by actuaries, auditors and the regulator.Interest rates, longevity hit PensionskassenIn almost identical statements, the two pension funds admitted to having “insufficiently accounted for the long-lasting low interest rate environment and the increase in longevity” in their calculations in the past.The funds also admitted to having “made mistakes in calculating rates”, which led to pension promises – and in turn the 2017 deficit – being “too high”.“Agreeing on the recovery plan is a major landmark for the future of the Pensionkasse and for securing payouts,” said Olaf Keese, chairman of the board both at the Caritas and Kölner Pensionskassen.Since 1 May, Keese has had a new colleague on the boards of both schemes. Robert Müller has been named as a full-time board member on the joint board for the Pensionskassen, replacing Stephan Sander who left at the end of April.Müller joins the Pensionskassen from S-PensionsManagement, the management arm of the Sparkassen pension funds, where Keese was its long-term chairman until 2017.