Pensions Week articles from December 2004

Pensions Week archives from December 2004

News: Wind-up victims to be taxed on FAS payouts.
December 6, 2004... Payments from the Financial Assistance Scheme (FAS) will be subject to tax deductions, resulting in even lower payments to eligible members, PW can reveal. The Department for Work and Pensions (DWP) admitted in a consultation meeting...

News: Brown's FSMA review to bring stakeholder and GPPs in line with occupational pensions.
December 6, 2004... The review of the Financial Services and Markets Act 2000, which will help encourage some of the 4.6 million workers without workplace pensions to join their company scheme and allow employers to promote their group personal pensions (GPPs) and...

News: Universal CP to be introduced by 2010.
December 6, 2004... A universal flat rate citizen's pension (CP) could be introduced by 2010, according to the initial findings of a working party set up by the National Association of Pensions Funds (NAPF). The NAPF has proposed a CP of GBP105 a week at...

News: Imerys fund members may face pension cuts due to oe48m deficit.
December 6, 2004... Members of the Imerys pension fund are facing significant cuts to their pension benefits after the French-owned materials company dished out early retirement and took contribution holidays, leaving it with a staggering GBP48m deficit, according...

News: Prudential rejects claims of mis-selling pension top-ups to teachers.
December 6, 2004... The Prudential is standing its ground over claims from teachers that it mis- sold them pension top-ups despite a flood of complaints to the ombudsman. The claims are levelled at Prudential for selling additional voluntary contributions...

News: Greenwich tenders for oe40m private equity mandate.
December 6, 2004... The GBP500m London Borough of Greenwich pension fund has gone out to tender for a private equity mandate for the first time in 10 years. The GBP40m mandate, equivalent to approximately 8% of the fund, will be derived partly from cash and...

News: State Street to service BA's oe10bn scheme.
December 6, 2004... The British Airways Pension Trustees' pension fund has appointed State Street investment service provider for the GBP10bn scheme. State Street will provide the in-house managed fund with global custody, fund accounting and security...

News: Watson shakes up format of its GAS programme.
December 6, 2004... Consultant Watson Wyatt is to change the format of its annual global asset study (GAS) programme of conferences in order to address perceptions of conflicts of interest. GAS involves fund managers who pay to be members of the programme. In...

News: Staffordshire seeks manager for oe339m index-tracking portfolio.
December 6, 2004... Staffordshire County Council pension fund has gone out to tender for an index-tracking multi-asset mandate. The portfolio, valued at GBP339m, will form part of the scheme's allocation to UK equities, European equities and US equities, on...

News: Negative equity returns hurt global plans.
December 6, 2004... Rising oil prices are eating away at multinational pension plan deficits, according research by consultants Towers Perrin. The majority of global plans are experiencing significant declines in pension fund values, because of negative equity...

News: Duffain to push Pioneer in UK.
December 6, 2004... Boston-based Pioneer Investments has poached Citigroup Asset Management's head of consultant relations, as part of its push into the UK institutional market. Kerry Duffain joins the firm as head of investment consultant relations in...

News: S2P needs to be reformed, says ABI.
December 6, 2004... The Association of British Insurers (ABI) has called for a reform on the state second pensions or S2P (previously known as Serps). The ABI argued that contracting out is not as effective today as it has been. It said reform would enable...

News: Non-exec directors named to PPF board.
December 6, 2004... The government has appointed five non-executive directors to the Pension Protection Fund (PPF) in a bid to prepare for its launch in April next year. The new appointments come at a critical time for the PPF, with only four months until it...

News: Industry rocked by Monckton's murder.
December 6, 2004... The investment industry was left in shock last week following the tragic news of Legal & General Investment Management director John Monckton's brutal murder. Monckton was well known in the industry and a much liked and respected...

News: Letters - Two ways to reduce TPA fees.
December 6, 2004... I was concerned to read some of the comments in your article about how new regulations may result in increased fees charged by third-party administrators (TPAs) (PW 29.11.04). There are two key points to make here. Firstly, while...

News: Debate still rages over value of corporate governance report.
December 6, 2004... Businesses are clashing over the effectiveness of Derek Higgs' report on corporate governance, with many arguing the set of principles are unnecessary. A year after its inception, large and small companies are divided over the value of the...

News: DMO to consider 50-year gilts.
December 6, 2004... The Debt Management Office (DMO) is to consult on issuing gilts dated up to 50 years and annuity gilts to help pension funds match their long-term liabilities. As part of the pre-Budget report, the DMO said it is considering the issue of...

News: LAPFF to study link between climate change and investment.
December 6, 2004... The LAPFF has instigated a climate change study to look into how the changing environment will affect investment strategies in years to come. Enviros Consulting has won the contract to undertake the study on LAPFF's behalf and it will...

News: Electronic voting has not been the panacea people expected.
December 6, 2004... Electronic proxy voting has been largely ignored by institutions and the voting system is still beset with problems, experts claim. Despite recommendations made by Paul Myners in his review on institutional investment on the use of...

News: Influence of finance departments grows.
December 6, 2004... Multinationals are giving their finance departments greater control over pensions and employee benefit plans in an attempt to minimise costs. Research by financial services firm Towers Perrin found that although human resources departments...

News: Punter Southall to provide solutions to dealing with changes in lead up to A-day.
December 6, 2004... UK consultancy Punter Southall has launched a complete series of solutions for companies, trustees and individuals to deal with the ensuing changes in the lead up to A-day. The consultancy's package will provide compliance advice for...

News: Sting in the tale - Simply confusing.
December 6, 2004... I have Victor Lewis-Smith to thank for the observation that if the human brain were ever simple enough for us to understand it, we would be too simple to understand it. Something like this seems to be going on with pensions in the UK at the...

News: Churchill admits PPF shorfalls.
December 6, 2004... The Pension Protection Fund (PPF) levy will be insufficient to secure benefits, Lawrence Churchill, chairman of PPF, said last week. Churchill admitted the PPF flaw at a recent National Association of Pension Funds meeting. Deborah...

News: Falconer defends judicial pensions bill.
December 6, 2004... Lord Falconer, secretary of state for Constitutional Affairs and Lord Chancellor, has defended the judicial pensions bill, saying it only enables judges to do what "everyone else is entitled to do" in relation to the GBP1.5m lifetime allowance....

News: Ombudsman watch.
December 6, 2004... Numbers Some numbers caught my attention this week: 23 billion, 600 million, 100 and 10. Ten is the suggested minimum number of codes of practice and 100 the minimum number of regulations said to be required to flesh out Pensions Act 2004....

Governance Watch: Danka in persistent violation of Combined Code.
December 6, 2004... Since 1994 Danka Business Systems, which is holding its AGM this week (7 December), has not proposed its report and accounts for shareholder approval, contrary to provisions within the Combined Code. Manifest notes that the decision not to...

Spotlight: Part Two - Solving the pensions crisis.
December 6, 2004... The Pensions Commission's interim report leaves us in no doubt that our pensions are in crisis. The headlines have all been about the uncomfortable choices that the report presents, but the analysis that the commission has carried out also...

Comment: Leader - Consistent pensions reform policy needed.
December 6, 2004... For good or ill, the government is in danger of painting itself into a corner on public sector pensions. On one hand it wants to ensure that public sector pension liabilities are kept under control, but on the other, if it acts to reduce these...

Comment: Personal view - A pension to die for.
December 6, 2004... Sam and Jim were born in the East End of London in 1940 around the time the blitz raged. They lived next door to each other in East Ham and nightly their homes were subjected to the Luftwaffe. They had no concept of what was going on. They and...

Comment: Inside view - The golden age for idea creation in pensions investment.
December 6, 2004... Albert Einstein was famous for many things, not least the ability to come up with a good quote, one of his most famous being: "In the middle of difficulty lies opportunity." Einstein always appeared to have a clear view of the problems of...

Special Focus: Derivatives - Intro.
December 6, 2004... Derivatives are enjoying large amounts of attention from the UK pension fund industry. These financial instruments, which have long been used successfully by corporates, are now finding their way into pension fund portfolios. This...

Special Focus: Derivatives - Managing the risk process with derivatives.
December 6, 2004... For some pension fund trustees the word derivatives produces an image of risky and complex financial instruments, while for others, it is a way of reducing or increasing risk for a portfolio of investments. Derivatives have been...

Special Focus: Derivatives - Derivatives: a tool for efficient fund management.
December 6, 2004... As widely reported, the pension fund industry has been suffering due to negative equity returns and low interest rates, leading to a serious underfunding of company pension plans. The general response to the situation from the pension fund...

Special Focus: Derivatives - Tailoring the global approach to investment banking.
December 6, 2004... The last couple of years have presented the European insurance and pension industry with a wealth of challenges. Falling interest rates and tightening credit spreads have made it difficult to reach the target return levels necessary to meet...

Special Focus: Derivatives - Company Profile - Eurex.
December 6, 2004... Background Eurex is the world's largest futures and options exchange and is jointly operated by Deutsche Borse AG and SWX Swiss Exchange. Eurex has been a pioneer in electronic trading of derivative products for over a decade, and it...

Special Focus: Derivatives - Company Profile.
December 6, 2004... Societe Generale Group Societe Generale is one of the largest financial services groups in the euro- zone. The group employs 88,000 people worldwide in three key businesses: - Retail banking and financial services: Societe Generale...

People on the move: Collings, Akopian join BAM's emerging markets team.
December 6, 2004... Baring Asset Management (BAM) has appointed Bryan Collings as global head of emerging markets and Marina Akopian as a senior investor in the emerging markets team. Reporting to head of equities, David Kiddie, Collings will lead the...

People on the move: Morley appoints Watts as head of its global fixed income team.
December 6, 2004... Morley Fund Management has appointed Mark Watts as head of global fixed income. Reporting to Ceris Williams, head of fixed income, Watts' role will be to enhance Morley's global aggregate products by harnessing the capabilities of the...

People on the move: Bedford managing director at Worldwide.
December 6, 2004... Worldwide Financial Planning, an IFA business, has appointed Andrew Bedford as managing director following a restructuring of its business. Peter McGahan, the current managing director and owner, becomes responsible for distribution...

People on the move: Young portfolio manager at Northern Trust.
December 6, 2004... Northern Trust Global Investments (NTGI) has appointed Kelly Young as a portfolio manager in its global quantitative management team. Based in London and reporting to Rodney Fernandes, European head of quantitative portfolio management,...

News Just In... : WM shows no major moves into property market despite high returns from Q3.
December 6, 2004... Pension funds saw staggering returns of 11% over the year to 30 September 2004 from property investments, according to the latest data from performance measurer The WM Company. In the third quarter ending September 2004, pension funds saw...

News Just In... : F&C to investigate companies' influence on government policy.
December 6, 2004... F&C Asset Management is to investigate how companies influence government policy and actions to provide investors with a sounder knowledge of what constitutes good practice. F&C warned that in an age where public scrutiny had increased,...

Spacial Focus: Investment Masterclass - Intro.
December 6, 2004... Where once equities were king of pension fund asset allocation, fixed income has stolen the crown with bonds becoming increasingly important to investment strategy. Fund managers, investment consultants and, crucially, pension funds see...

Spacial Focus: Investment Masterclass: Bonds - Taking a look at the basics of bonds.
December 6, 2004... For those not involved in bonds and bond markets, the concepts behind them are shrouded in a veil of complexity. Here we provide a simple introduction to some basic concepts and terminology to enable a better understanding of the issues...

Spacial Focus: Investment Masterclass: Liability-led solutions - Creating effective liability matching solutions.
December 6, 2004... Defining the investment needs of pension funds need not be difficult. Defining the principles and areas of change that are required to achieve those needs is not difficult either. The real challenge is to come up with practical investment...

Spacial Focus: Investment Masterclass: Liability-led investment - Liability- led investment for smaller schemes.
December 6, 2004... For smaller schemes looking to match their liabilities, the greatest concern is the effect on liabilities of movements in current and expected future interest rates. It is this effect that fixed income based liability-led approaches generally...

Spacial Focus: Investment Masterclass: Increasing alpha - Strategies for higher alpha bond mandates.
December 6, 2004... As bond weightings within funds have increased, there has been an increasing desire from charity, pension and insurance clients for an increased level of alpha generation by bond managers. We will briefly explore the main factors which need to...

Spacial Focus: Investment Masterclass: Currency management - Examing the value of currency management.
December 6, 2004... Currency management has received a lot of attention recently. Data published by Mercer Human Resource Consulting in August found that 15 out of 16 searches for currency overlay mandates, undertaken by the firm worldwide in the previous six...

News: Emerging markets fund managers bag top fees.
December 13, 2004... Pension funds are paying higher prices for substantial outperformance from their fund managers, which has seen fees for some asset classes rocket way above the average. A recent study found that fees are the highest in asset classes where...

News: Pensions industry to be duty bound to report breaches of the law to pension regulator.
December 13, 2004... Whistleblowing to the pensions regulator is being forced through as 'a duty' for a wide section of the pensions industry under the government's consultation document on codes of practice. From April 2005 the government is turning up the...

News: DC simplification proposals should also apply to DB pensions, says NAPF.
December 13, 2004... Simplification proposals for defined contribution (DC) arrangements should extend to defined benefit (DB) plans, the National Association of Pension Funds (NAPF) argued. Commenting on the government's consultation on the removal of...

News: Unions clash over civil service pension changes.
December 13, 2004... A major union has backed the government's proposals on amendments to the civil service pension scheme, jeopardising the possibility of mass strike action. Prospect, the union representing specialist staff in the public and private sectors,...

News: Transferred employees to receive pension protection under Tupe.
December 13, 2004... Workers' pensions are to be protected if their contract is transferred to another employer under regulations proposed by the government last week. Workers have previously lost out on having their pension rights safeguarded when their...

News: Hughes named non-executive director of PPF board.
December 13, 2004... The Pension Protection Fund (PPF) has boosted its access to expert advice with the appointment of Christopher Hughes as a non-executive director. Hughes is a partner at law firm Wragge & Co and is one of five new non- executives charged...

News: Northamptonshire puts out to tender for specialist mandates.
December 13, 2004... A large local authority pension fund is set to drop its balanced fund managers as it moves to a specialist investment structure. The GBP745m Northamptonshire County Council pension fund has put out to tender for a series of specialist...

News: Threadneedle to break into global equities market.
December 13, 2004... Threadneedle Investments is stepping up its efforts to win global equity mandates from pension funds after identifying it as an area of interest for institutional investors. The fund manager said it can meet the high return targets that...

News: Aberdeen City Council seeks to appoint specialist fund managers.
December 13, 2004... The GBP1.1bn Aberdeen City Council pension fund has gone out to tender for a number of mandates as part of its shift from a balanced to a specialist structure. The scheme made the decision to follow the specialist investment structure...

News: Avebury partners with The Real Return.
December 13, 2004... The Real Return Holdings Company and Avebury Asset Management Group have formed a strategic alliance to help develop their business. The merger will allow the two firms to share their investment platforms and abilities. The alliance...

News: Waltham outsources pensions administration.
December 13, 2004... The London Borough of Waltham Forest is to outsource its pensions administration services for the first time to meet best value requirements. The council has put out to tender for a pensions administrator that will be appointed in June...

News: Government urged to scrap latest stealth tax.
December 13, 2004... The Association of British Insurers (ABI) has slammed the government's decision to increase the taxation of policy- holder funds in with-profits businesses, presented in Gordon Brown's pre-Budget report earlier this month. Peter Vipond,...

News: UBS to extend its targeted return range with DC launch.
December 13, 2004... UBS Global Asset Management is to launch a defined contribution (DC) pension version of its targeted return product in the UK in 2005. The product will aim to consistently produce returns based on the LIBOR (London inter bank offered rate)...

News: Orbit to manage Benfield online benefit statements.
December 13, 2004... Orbit has been retained by major reinsurance intermediary Benfield to manage and update its online benefit statements received by its 800 employees. Benfield employees will now instantly be able to work out the true value of all their...

News: Warm welcome awaits 50-year gilts, says Axa.
December 13, 2004... Axa Investment Management has called for the issuance of 50-year government gilts, as it would help pension schemes to more effectively match assets to liabilities. Axa said demand would be huge for straightforward inflation-linked...

News: Forum warns about risk of unethical investing.
December 13, 2004... The UK Social Investment Forum (UKSIF) has sent out a warning shot to pension funds of the financial risks associated with buying into companies which do not have socially responsible business practices. Just Pensions, a programme of the...

News: Abbey creates simplification guide for advisers on CD.
December 13, 2004... Abbey for Intermediaries has produced a simplification guide on CD to help advisers prepare for the arrival of pensions simplification in 2006. Abbey said scheme members who may have a tax-free cash entitlement over 25% may need to take...

News: Wrap market in tangles.
December 13, 2004... Wrap providers need to provide more pension facilities to make them more appealing, research company Defaqto said. A report by Defaqto stated that take-up, particularly among self-invested personal pension investors, would be minimal in the...

News: Global equities set for higher weightings in pension funds.
December 13, 2004... Equities will continue to play a significant role for UK pension funds, despite falling allocations to the asset class in recent years, according to Pensions Week's latest investment panel discussion. However, the panel argued that there is...

News: European firms not ready for IAS 19 2005 starting date.
December 13, 2004... Nearly half of all European companies do not know how to deal with the pensions accounting standard IAS 19, according to a major consultant. Research by Mercer Human Resource Consulting (MHRC) found that 20% of the companies surveyed cited...

News: Insight opens door to property fund.
December 13, 2004... Insight Investment has opened its property portfolio fund to investors. The fund exposes investors to the UK commercial property market through a fund- of-funds approach. The fund is an open-ended Guernsey-based unit trust and is expected...

News: USS selects Personal Finance Society to help advise scheme members.
December 13, 2004... One of UK's biggest pension funds, the Universities Superannuation Scheme (USS), is to recommend advisers from the newly formed Personal Finance Society (PFS) to members that want individual advice. The scheme will be piloted initially in...

News: Axa takes State Street as partner in investment admin.
December 13, 2004... Axa Investment Managers (Axa IM) has outsourced its GBP207bn investment operations to State Street, which includes the transfer of 300 staff to the back office services provider. Axa IM said the move allowed it to focus on its core...

News: Increased communication needed to boost savings.
December 13, 2004... The majority of employers do not think their workers appreciate their company pensions, research has revealed. A survey by financial services firm Mellon Human Resources & Investor Solutions found that only 41% of companies thought their...

News: The Exchange creates research tool for financial advisers.
December 13, 2004... The Exchange, which provides portal services to financial advisers, has launched a research tool to equip financial advisers to give efficient and timely advice to clients. The tool - Synaptic Smart Search - covers retirement planning, life...

News: Trustee - The cost of performance.
December 13, 2004... I was asked recently if I was offended by the enormous salaries being paid to investment bankers, fund managers and the like. My reply surprised the questioner. London dominates the European financial scene with financial services...

News: IBM scheme members drop appeal plans.
December 13, 2004... Members of the IBM pension scheme have decided not to appeal against the ombudsman's determination made last month. The members were given leave to appeal after pensions ombudsman, David Laverick, decided not to uphold any of the complaints...

News: Concerns over cost of citizen's pension.
December 13, 2004... The new citizen's pension rolled out by the National Association of Pension Funds (NAPF) could face a backlash in support because of mounting costs, industry analysts warned. The NAPF said the proposals could be introduced as early as 2010,...

News: Ombudsman watch.
December 13, 2004... Health I am something of a fan of research papers produced by the Center for Retirement Research at Boston College in the USA. This may be because I am increasingly being persuaded by my partner, Andrew Pipe, of the view that where the USA...

Governance watch: Royal Dutch/Shell opts for unified board structure.
December 13, 2004... The oil group Royal Dutch/Shell's governance has been criticised in the wake of the scandal surrounding the over reporting of its oil and gas reserves which led to the resignations at the top of the company. This sparked a review of its...

Spotlight: Decreasing deficits by investing in emerging debt.
December 13, 2004... Due to the downturn in global equities starting in 2000, many pension funds lost a substantial portion of their value, and they now have major unfunded liabilities. To meet these liabilities target rates of return are often as high as 8 or 9%,...

Opinion: Leader - To buy or not to buy an annuity? That is the question.
December 13, 2004... If the test of pensions simplification is whether it adds or deducts from the number of pensions acronyms, then it looks like it is failing, with the addition of items such as ASP, or an alternatively secured pension. ASP is one, still to...

Opinion: Personal view - Is contracting-out on the way out?
December 13, 2004... There is a clear consensus among pension experts that the first tier of state provision needs strengthening. But the proposals often have less to say about the future of the state second pension, and by implication, contracting-out. Many...

Opinion: Inside view - Using stochastic modelling to manage risk.
December 13, 2004... The life and pensions industry has often been accused of moving incredibly slowly when it comes to implementing new initiatives. While this has sometimes been an entirely fair assessment of events, it is also reasonable to add that, in some...

Investment Panel: The Role of Equities in Portfolios - Intro.
December 13, 2004... The importance of equities to UK pension fund portfolios remains paramount despite the general trend away from stocks and into fixed income. The latest Pensions Week Investment Panel looks at the role of equities in investment strategy for...

Investment Panel: Profiles.
December 13, 2004... Chris Rodgers, head of UK equities at HSBC Asset Management Chris joined HSBC Asset Management in 2003 as head of UK equities. He has overall responsibility for the UK equity investment process and UK equity performance. In addition, he has...