While the German pension fund association and PensionsEurope criticised the inclusion of the HBS in the assessment, Valkenburg said it made sense from “an efficiency point of view” to have pension funds calculate the HBS for the quantitative assessment and then use them in the stress test.But the actuary also argued that it was “very difficult to have a single framework for capital requirements” in the pensions sector, as schemes are “executing pension promises in very different ways”.He said using a single risk-free rate would work if all the pensions funds used stochastic evaluations, and the risks were modelled in the same way.But he said this was not the case in reality.“Using a risk-free rate to give a good estimate of the valuation of pension promises that are not fully guaranteed would lead to too high values if the risks are not modelled in the cash flows,” he said. Valkenburg said one of the most “valuable” aspects of the stress tests EIOPA will conduct among European IORPs will be the assessment of defined contribution (DC) plans.While industry group PensionsEurope has questioned whether the stress tests will yield any useful results regarding DC scheme members, Valkenburg stressed the importance of “informing members about how a stressed situation can impact them”.He added: “It is good to see DC is included in the stress tests for the first time because most new accrual of pension assets in Europe is in DC.”One of the goals of the stress test is to assess the impact on the macro economy, which, according to Valkenburg, will not be as great as the impact on individual members who “might have less money to buy a pension” on retirement.“This is important to be aware of, and, hopefully, we can help members to navigate through their lives and minimise the impact,” he said.The AAE issued a paper in February on decumulation in which it warned that the requirement to buy an annuity on the day of retirement might force people to buy at the wrong time.Valkenburg said the stress test might also highlight the problem of guarantees being much higher than the current interest rate. “Guarantees are very expensive, and they were given in times when stakeholders were not expecting a sudden change in the environment like we have seen in the past couple of years,” he said.Valkenburg expects guarantees to come down or be removed altogether in the wake of the stress tests, which he said would, in turn, highlight the problem of people having to work longer. The European Insurance and Occupational Pensions Authority (EIOPA) needs to “take another look” at using the holistic balance sheet (HBS) approach as a means of calculating capital requirements, according to Falco Valkenburg, chair of the Actuarial Association of Europe’s (AAE) pensions committee.Valkenburg said the HBS was “an interesting concept that should be explored further, maybe as part of pension funds’ risk management”, but he also stressed that the HBS concept was “quite new”.“Not even we at the AAE are fully convinced it will lead to something that can work in practice,” he said. EIOPA announced the details of its first stress test for occupational pension funds on Monday.
KYLE Kuzma’s 3-pointer with 0.4 seconds left lifted Los Angeles Lakers to a 124-121 victory over the Denver Nuggets on Monday night near Orlando.LeBron James had 29 points 12 assists for the Lakers, who snapped a three-game losing streak. Anthony Davis finished with 27 points, and Kuzma contributed 25.Reserve guard PJ Dozier had 18 points to lead the Nuggets, who had eight players reach double figures. Michael Porter Jr had 15 points on 6-of-6 shooting, including 3-of-3 on 3-pointers. Jamal Murray had 14 points, Paul Millsap scored 13 and Nikola Jokic chipped in 12 for Denver. The Nuggets rested their starters for much of the fourth quarter, and the loss left them 1-1/2 games back of Los Angeles Clippers for the No. 2 seed in the Western Conference with two games remaining. The two teams meet today.Toronto Raptors 114 – Milwaukee Bucks 106 Chris Boucher had a career-best 25 points to go with 11 rebounds, and Toronto defeated Milwaukee for the first time this season as both teams played without key players.Matt Thomas added a career-best 22 points for Raptors and Norman Powell had 21 points and eight rebounds. Pascal Siakam added 14 points for Toronto.Kyle Korver scored 19 points for Milwaukee, Khris Middleton had 17, and George Hill netted 14.Phoenix Suns 128 – Oklahoma City Thunder 101 Devin Booker scored 35 points and Phoenix continued its surprising undefeated run through the NBA bubble, cruising past short-handed Oklahoma City.Booker, who sat out the fourth quarter, notched his 90th career 30-point game and tied Suns legend Walter Davis for most 30-point games in franchise history. Mikal Bridges and rookie Cameron Johnson added 18 points each for Suns, who have won all six seeding games in the bubble and remain in the thick of the race for a post-season berth.Darius Bazley’s 22 points and 10 rebounds led Thunder. Oklahoma City, who lost a 15-point lead in the first half and have already clinched a playoff spot and are 3-3 in the bubble.Dallas Mavericks 122 – Utah Jazz 114 Tim Hardaway Jr led Dallas with 27 points and Seth Curry added 22 to lead Mavericks to a victory over Utah.Boban Marjanovic added 20 points and nine rebounds and J.J. Barea chipped in 18 for Mavericks, who rallied from a 22-point deficit.Jordan Clarkson scored 18 points to lead Utah. Rayjon Tucker added a career-high 17 points while Emmanuel Mudiay added 14 and Georges Niang chipped in 13 for Jazz, who blew a late double-digit lead for a second straight game.Miami Heat 114 – Indiana Pacers 92 Jimmy Butler, returning from a three-game injury absence, had game-highs with 19 points 11 rebounds four steals, to lead Miami past Indiana and into sole possession of fourth place in the Eastern Conference.Butler, who also had five assists in 29 minutes, had been out with a sore right foot. The teams were tied at halftime, but Heat led by as many as 18 points in an explosive third quarter and cruised from there, cooling off Pacers star T.J. Warren along the way.Warren entered Monday as the league’s top scorer in the restart, averaging an impressive 34.8 points on 60.5 percent shooting from the floor and 55.6 percent on 3-point attempts. However, Miami held him to 12 points on 5-for-14 shooting, including 2-for-6 on 3-point attempts. Victor Oladipo led Indiana with 14 points. (Field Level Media)