Aviva and Mercer hired to resolve German fund Aquila Capital’s compliance issues


A German fund group audited by KPMG turned to fund giants Aviva and Mercer for a solution to a long-standing compliance issue in its UK arm, which was reported to regulators in January.

German € 13 billion fund management firm Aquila Capital sent an email to its London staff on June 23 stating that it had selected fund giant Aviva as its pension provider and that a program would incorporate the investment in an environment, social and governance fund managed by Mercer. .

The email, seen by Financial news, was from Marc-Aurel Kaiser, Human Resources Director of the Sustainable Investment Group. He called on the London staff of Aquila Capital to participate in a June 29 briefing and “one-on-one” meetings on the new “our advisers, Mercer” pension scheme.

Lars Meisinger of Aquila Capital, head of Aquila Capital’s international client advisory unit, was listed as a “mandatory” participant in these meetings. Meisinger is the director of the UK branch of the fund group and also sits on the board of its German entity, according to a person familiar with the group’s management structure.

READ Aquila Capital, audited by KPMG, reported to regulators a multi-year non-compliance in the UK branch

Meisinger previously served as COO of BlackRock’s Alternatives branch in the EMEA region and was responsible for strategic product development at UBS Asset Management, according to the Aquila Capital website.

The announcement of the pension provisions comes a week after FN reported that Aquila Capital had not contributed to a pension scheme for its UK employees in the two years since it was legally required to do so in July 2019. The company said it employed seven people in his London team last month. KPMG and Aquila Capital declined to comment on FN on the matter at the time.

Evolve, a pension fund approached by Aquila Capital in 2020, said FN he had “no choice but to report” the group of funds to the British pension regulator in January after signing up for Evolve’s services, but did not submit relevant data or make a payment.

British pension law experts, who were not involved in the case, said FN last week that failure to comply could see the sustainable investment group facing thousands of pounds in fines. KPMG and Aquila Capital also declined to comment at the time on any ramifications.

UK law requires employers to automatically enroll their employees in the country in an occupational pension scheme, no later than three months after an employee has started working, and to start contributing to that scheme on behalf of the employee since then.

Aquila’s failure to comply prompted those who knew him to question the fund group’s credentials as an environmental, social and governance investor, FN reported last week. This ESG criticism has come against a backdrop of growing backlash against fund groups that espouse their environmental, social and governance credentials. In mid-September, Desiree Fixler, the former head of sustainability at German asset manager DWS, alleged that the company had distorted its ESG capabilities in its 2020 annual report. Aquila Capital declined to comment on these criticisms to the time.

Three months after Aquila’s June 23 email, UK employees at Aquila had not made it clear whether a pension scheme had been put in place on their behalf, according to a person familiar with the matter.

“Set aside the past two years and more, although we assume that Aquila Capital only started talking to the repo provider on the day of this email, there is no reason why they should not. is still not ready to deploy the pension, ”the person said.

Aquila Capital can “legitimately explain why there was a long delay” and ask if “given the violation and the fact that it has been over 3 months in their working relationship and no payment has been made, Have Mercer or Aviva fulfilled their obligation to report Aquila Capital to the regulator ”.

A spokesperson for Aviva said, “We will not comment on specific pension plans, but we can confirm that we have processes in place to monitor late payments in accordance with codes of practice and guidelines. pension regulator. When payments have not been made, we engage with the employer to resolve the situation, however, if payments remain unpaid, we will notify the pension regulator and notify plan members.

The person Mercer and Aquila Capital were “unable to answer questions about backdated contributions” to staff pensions at the June 29 briefing and subsequent individual sessions on the subject

“The impression is that prior to the briefing and one-on-one sessions, Aquila Capital and Mercer had not factored in or calculated back-dated contributions and how employees should be compensated,” the person said.

A spokesperson for Mercer declined to comment.

Aquila Capital’s June 23 email said it was “delighted to announce the launch of the Aquila UK retirement plan”.

The email read: “Some of the main benefits of the plan are as follows: Aquila contributions of 6% of base salary, a competitive load base… a default fund managed by Mercer that was designed around factors. environmental, social and governance, a wide range of investment choices among a range of fund managers, the exchange of wages for the payment of your contributions, the backdating of Aquila contributions. “

A spokesperson for Aquila Capital declined to comment.

A spokesperson for the UK pensions regulator declined to comment.

To contact the author of this story with comments or news, email Lucy McNulty


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