Pensions Week articles from February 2008

Pensions Week archives from February 2008

News: ASB liability rate may cause buyouts to swell.
February 4, 2008... Byline: David Ricketts Controversial proposals for measuring pension scheme liabilities could lead to a surge in companies attracted to buyouts, industry experts have warned. Proposals by the Accounting Standards Board (ASB) focus on...

News: PPFO turns down scheme appeal for levy reduction.
February 4, 2008... Byline: Tom Willetts The Pension Protection Fund Ombudsman (PPFO) has issued its first determination in turning down a scheme's appeal for a smaller levy payment. Trustees of the High-Point Rendel (HPR) pension scheme had sought a...

This week: Putting the sunny side up.
February 4, 2008... Byline: David Rowley - Acting editor, Pensions Week The headline writers of the nationals have had it in for pension schemes big time over the last few weeks - 'Pension gap looks unsustainable', 'New fears on pensions deficits', 'Pensions...

News: ITS fights for wind-up deal for Ilford fund.
February 4, 2008... Byline: Tom Willetts A unique plan to gain the best outcome for all members of a pension scheme that could enter the Pension Protection Fund (PPF) has been made. Independent Trustee Services (ITS) has drawn up the proposals after...

News: Government moves to deliver on FAS pledges.
February 4, 2008... Byline: Tom Willetts The government has taken steps to ensure speedy payments to those scheme members relying on the Financial Assistance Scheme (FAS). Almost 4,500 members are eligible and a further 5,000 will become so when the FAS...

News: Trustees appeal ruling that limits their power.
February 4, 2008... Byline: David Rowley A landmark judgment that threatened to limit trustees' ability to change scheme rules is to be appealed. Many lawyers had questioned the judgment in the Smithson vs Hamilton case that appeared to overrule an...

News: Sackers' success set to continue in 2008.
February 4, 2008... Byline: Tom Willetts Sackers & Partners claims to have become the largest pensions practice in the UK after its involvement in 'most of the landmark cases' in 2007. The firm now has 49 lawyers, and advises more than 800 pension...

News in brief.
February 4, 2008... The British Coal Staff Superannuation Scheme has increased pensions for 2008 in line with the retail price index of 4.3%. The scheme is the 11th largest in the UK, with a capital value of GBP11bn, and has 76,701 members, of which 65,789 are...

News: Group Sipp now sole scheme for one in 50.
February 4, 2008... Byline: David Rowley Just under a third of all employers (29%) are taking advantage of salary sacrifice to boost employees' pensions, according to the Chartered Institute of Personnel and Development's annual reward survey. Employers...

News: CMI survey reveals lack of concern for risk and regulation.
February 4, 2008... Byline: Tom Willetts Organisations in the pensions sector are overconfident about their ability to cope with uncertainty and change, said the Chartered Management Institute (CMI). Only 47% identified managing risks as the most...

News: LAPFF urges more non-financial targets.
February 4, 2008... Byline: Tom Willetts Executive directors' performance-based pay should be more closely tied to non-financial targets, according to the Local Authority Pension Fund Forum (LAPFF). Its study found that only seven FTSE 100 companies built...

News: Railways to close DB to protect its members.
February 4, 2008... Byline: David Rowley The Railways Pension Scheme is planning to close its final salary offering to new employees and raise contributions for existing members. A report produced by the Railways Pensions Commission sets out a proposal...

News: FP to focus on acquiring larger schemes.
February 4, 2008... Byline: David Ricketts Friends Provident (FP) plans to offload its 52% stake in F&C Asset Management in a bid to boost UK and international pension sales. The proposals are made in the firm's strategic review, which also lays down...

News in brief.
February 4, 2008... The National Association of Pension Funds (NAPF) believes the power of finance directors over pension schemes will grow as 2012 pension reforms approach, and compulsory auto-enrolment increases cost pressure. Joanne Segars, chief executive...

News: PADA consultation to scrutinise PA charges.
February 4, 2008... Byline: David Ricketts Opinion is being sought on how employees should be charged for personal accounts in a consultation by the Personal Accounts Delivery Authority (PADA). The three-month consultation will seek feedback on four...

News: UK funds top equity allocation rankings in 2007.
February 4, 2008... Byline: David Ricketts UK pension schemes had the highest equity allocation globally during 2007, a survey by Watson Wyatt has found. This was in spite of UK pension funds' equity allocations shrinking from around 60% to 56% during...

News: PA loophole open to abuse by employers.
February 4, 2008... Byline: David Ricketts A potential loophole in personal accounts, which could see some employees losing out on employer contributions, has been identified by actuaries. Gary Tansley, consultant at Hamish Wilson, warned that those who...

News: Durham goes for a dynamic strategy.
February 4, 2008... Byline: David Ricketts Durham County Council has assigned 8% of its pension fund to a dynamic asset allocation mandate following a review of its investment managers. The allocation is being cited as a logical response to increasing...

News: Funds take an active interest in absolute returns.
February 4, 2008... Byline: David Rowley Pension funds will continue the move into absolute return strategies over 2008 according to a poll of 100 fund managers conducted by Hewitt Associates. Its survey, at a seminar hosted by the investment practice of...

News: Managers seek alpha via innovation.
February 4, 2008... Byline: David Ricketts Institutional investors are choosing to pour new assets into high alpha and global equity, a survey by Investment Solutions has found. However, the 2007 asset management trend survey carried out by the multi-...

Current affairs: Talking heads.
February 4, 2008... Byline: David Ricketts 1 - Is paying lay trustees GBP3,000-GBP5,000 a year a good thing? 2 - As investments become more complex do you believe trustees should act like non-executive directors of their fund's investment strategies? ...

Current Affairs: Prepare for the dawn of a new era.
February 4, 2008... Byline: Frank Field Three recent events signalled the world entering a post-Reagan/Thatcher age. The first was not only the rescuing of the most prestigious bastions of Western capitalism by communist-owned sovereign wealth funds, but that...

The insider: Personal view - Dump your actuary ahead of Valentine's Day if you're looking for investment love.
February 4, 2008... Byline: John Broome Saunders With an ever growing range of investment options for defined benefit (DB) schemes available, many trustees find determining a coherent, justifiable investment strategy increasingly difficult. Nowadays, not...

The Insider: Technical view - Trustees should leave no stone unturned.
February 4, 2008... Byline: David Poynton In a recent survey of trustee boards commissioned by Gazelle Pensions Advisory, 35% stated they do not seek any independent advice on employer covenant, and few of them expect to do so in future. There are several...

Industry watch: Governance - Remuneration must also reflect non-financial factors.
February 4, 2008... Byline: Tom Powdrill Company directors can achieve unsustainable growth in many ways. But what if things go wrong? In July 2007, Cadbury was fined GBP1m for selling chocolate contaminated with salmonella; BP failed spectacularly on safety,...

Industry watch: Notice board - NAPF events and training.(Conference news)
February 4, 2008... NAPF investment conference - investing today, securing tomorrow March 5-7, 2008 Edinburgh International Conference Centre This is the essential event for those involved in pensions investment strategies. Former Bank of England...

Industry watch: View from the bridge.
February 4, 2008... Byline: Norman Russell Jobs for the boys Sometimes children can be a bit of a disappointment. Compare Freddie Conway, son of Tory MP Derek Conway, and my son, Ben. While studying at Newcastle University, the enterprising Freddie...

Trusty30: Volatility survey.
February 4, 2008... Byline: David Rowley Pension funds are long-term investors and should not, in theory, get easily spooked by big market falls. However, the events of the week January 21-25 were so dramatic we felt it necessary to gauge reactions. Some...

On the move: Matthews seeks a stable future at FP.
February 4, 2008... Byline: Tom Willetts Trevor Matthews has quit as chief executive officer (CEO) of Standard Life Assurance to become group CEO of Friends Provident. Matthews was reportedly unhappy at not being selected to succeed Standard Life's...

On the move: Going places.
February 4, 2008... Mayhew leaves Mercer for Buck Buck Consultants has hired Mark Mayhew as principal and sales consultant from rival Mercer Human Resource Consulting. Mayhew has more than 30 years' experience in the employee benefits sector and will be...

On the move: Top 4 moves.
February 4, 2008... 01 - Iain Mather, Rogier van de Grift & Michael Burnham OLD - Mather joins from Morgan Stanley Investment Management, van de Grift from ABP Investments and Burnham from BT Funds Management NEW - They join Principal Global Investors ...

News: Pensions Corp eyes up public sector liabilities.
February 11, 2008... Byline: Tom Willetts Several public sector pension schemes are in talks with buyout firm the Pensions Corporation over full and partial sales of their liabilities. The value of the biggest schemes involved are believed to be in the...

News: College staff in redundancy halt wrangle.
February 11, 2008... Byline: David Ricketts Around 250 college lecturers have been told they will not receive the enhanced pension packages they were promised as part of a redundancy deal. The lecturers, who are members of the Northern Ireland teacher...

This week: In spite of all the danger.
February 11, 2008... Byline: David Rowley - Acting editor, Pensions Week As I write, a survey has just come through of which the main finding simply states: "Employees are NOT in a position to manage the risks associated with workplace pension provision". The...

News: Regulator tipped to flex muscles after FSD victory.
February 11, 2008... Byline: David Rowley The Pensions Regulator will be bolder in issuing financial service directions (FSD) after success in getting Sea Containers to admit liability for two pension schemes' deficits. This was the view of a leading...

News: Moral victory for PAG but government to fight on.
February 11, 2008... Byline: David Ricketts The Pensions Action Group (PAG) has won its judicial review against the government, but the decision will provide little more than a moral victory for campaigners. The decision by the Court of Appeal found the...

News: ASB proposals could swell BT fund by GBP4.1bn.
February 11, 2008... Byline: David Ricketts The BT pension fund could see its pension liabilities rise to GBP42.9bn if controversial accounting proposals are approved, a leading independent consultant has suggested. The claim was made by John Ralfe in a...

News in brief.
February 11, 2008... The Institute of Economic Affairs (IEA) estimates public sector unfunded occupational pension liabilities have risen to just over GBP1bn. It notes that the government has reduced the real (after inflation) discount rate it applies to...

News: Adviser commission set to continue for FP rivals.
February 11, 2008... Byline: David Rowley Competitors of Friends Provident have declared they will not be following its trend to end commission payments to advisers on group pensions Both Norwich Union and Aegon Scottish Equitable said they were committed...

News: Paternoster lures Baker to become investment director.
February 11, 2008... Byline: Tom Willetts Buyout firm Paternoster has acquired an investment manager from the GBP6bn BAE Systems Pension Fund to create a new investment director post. Chris Baker, who has 25 years' experience in the credit markets, was...

News: JPM wins West Midlands Metropolitan mandate.
February 11, 2008... Byline: David Rowley The GBP7.9bn West Midlands Metropolitan Authorities Pension Fund has appointed JPMorgan to provide currency hedging for its non-UK assets. The fund is moving to an asset allocation of 30% UK equities and 30%...

News: Assumption rise could add GBP6bn to FTSE 100 liabilities.
February 11, 2008... Byline: David Rowley Good investment returns have encouraged 10 FTSE100 employers to up the mortality assumptions on their pension scheme members, according to research by Watson Wyatt. The analysis was based on disclosures in...

News: DB accounting rules unhelpful.
February 11, 2008... Byline: David Ricketts Current accounting rules for defined benefit pension plans are misleading, according to a report by leading academics. Research conducted at Cass Business School says rules that require a pension scheme's funding...

News: Investment comment - A dedicated follower of asset allocation.
February 11, 2008... Byline: Stephen Holt Principal Global Investors Welcome to the first investment comment, a regular slot that asks asset management industry experts to comment on investment topics that will be of interest to Pensions Week's...

News: Threadneedle boosts DC offering with Invesco book.
February 11, 2008... Byline: David Rowley Threadneedle has acquired Invesco Perpetual's full service defined contribution pension business, taking its DC assets to GBP1.3bn. It sees the move as showing its commitment to the DC market and helping it develop...

News: Smaller employers could be pushed towards buyout.
February 11, 2008... Byline: David Ricketts Close to a third of smaller employers' defined benefit (DB) schemes have funding levels of 75% or less, according to a leading actuarial firm. Hazell Carr says that while many employers have increased...

News: Merseyside to highlight scheme changes with DVD.
February 11, 2008... Byline: David Rowley The Merseyside pension fund is ensuring all its members understand forthcoming rule changes by sending out educational DVDs. Local Government Pension Scheme changes - that come into force on April 1st - include...

News: Private equity takeover feared by 72% of trustees.
February 11, 2008... Byline: David Ricketts More than three-quarters of pension trustees fear the prospect of a private equity takeover, according to Aon Consulting. Research carried out by the consultant found 72% of trustees would be concerned if their...

News: IOPS introduces fund guidelines to alternatives.
February 11, 2008... Byline: Tom Willetts A set of risk management guidelines for pension funds wishing to invest in alternative investments has been published by a global group of pension experts. The International Organisation of Pension Supervisors...

News: Currency investors rocked by crunch.
February 11, 2008... Byline: David Rowley Pension funds investing in currency have seen wildly fluctuating fortunes over 2007, according to Mercer. Many managers have suffered from volatility brought on by the credit crunch in August, says Diane Miller,...

Current affairs: Head to Head.
February 11, 2008... Byline: David Ricketts 1 - Will the ASB proposals lead to greater transparency in reporting pension scheme liabilities? 2 - What implications are there for trustees in the proposals? 3 - Do you see any unintended consequences for...

Current affairs: If I knew then what I know now.
February 11, 2008... Byline: Sally Bridgeland I am not Raj Mody. Raj Mody is away this week. He will return. In the meantime, you have me. I am Sally Bridgeland, chief executive officer (CEO) of the BP Pension Trustees. Let me tell you a story. Once upon a...

The insider: Personal view - Rely on the grapevine effect for your company scheme to succeed.
February 11, 2008... Byline: Darren Laverty After much discussion, you've finally decided to take the plunge and change your pension scheme. Much of the administration and installation may be complete, so how are you going to tell your employees about the new...

The Insider: Technical view - US waves the governance flag high.
February 11, 2008... Byline: Patrick Daniels Since the Enron fraud became the worldwide symbol of executive excess and chicanery in the US financial markets, UK institutional investors have become increasingly active in US shareholder actions. As they gain...

Industry watch: Governance - No smoking gun found in Northern Rock calamity.
February 11, 2008... Byline: Tom Powdrill The recent Treasury Select Committee report on Northern Rock's failure offers a comprehensive view and is required reading for anyone who wants to try and understand how even large, well established companies can face...

Industry watch: Notice board - NAPF training and events.(Conference news)
February 11, 2008... NAPF investment conference - investing today, securing tomorrow March 5-7, 2008 Edinburgh International Conference Centre This is the essential event for those involved in pensions investment strategies. Former Bank of England...

Industry watch: View from the bridge.
February 11, 2008... Byline: Norman Russell Us and them When it comes to retirement and age discrimination, there is one law for lawyers, who are partners or judges, and another for just about everyone else. You would think that when lawyers and those who...

Pensions workout: Beginner - Risk-sharing - Beginners' level.
February 11, 2008... Defined benefit (DB) pension schemes are great for pension scheme members. If they stay with a firm until retirement, they know not only that they will have an income for the rest of their life, but what proportion of their preretirement...

On the move: Millar moves to SLI as investment director.
February 11, 2008... Byline: Tom Willetts Standard Life Investments (SLI) has boosted its multi-asset investment team with the appointment of David Millar as investment director. Joining from Scottish Widows Investment Partnership, where he was head of...

On the move: Going places.
February 11, 2008... Watson Wyatt hires two consultants Watson Wyatt has responded to increased demand for investment advice from pension funds in the Leeds area with two appointments. Jonathan Fish joins from Mercer as a senior investment consultant in...

On the move: Top 4 moves.
February 11, 2008... 01 - Trevor Matthews OLD - Matthews leaves Standard Life Assurance NEW - He becomes group chief executive officer of Friends Provident Tel: 0870 608 3678 02 - Mark Mayhew OLD - Mayhew worked in a variety of sales roles at...

News: Accounting proposals look unstoppable.
February 18, 2008... Byline: David Rowley Tougher accounting standards for pensions are "inexorable" according to a member of the International Accounting Standards Board (IASB) pension working party. The comment dashes hopes that lobbying will bring a...

News: Clash over plans for mortality trigger point.
February 18, 2008... Byline: David Ricketts A proposal to identify schemes with overly generous mortality assumptions could end up misleading pension schemes, a consultant has warned. The Pensions Regulator, which is to publish a consultation this week...

This week: Apocalypse now for DB schemes.
February 18, 2008... Byline: David Rowley - Acting editor, Pensions Week Time is running out on future accrual for defined benefit (DB) schemes as we know them. The run of bad news on DB scheme liabilities in the last few weeks has been unrelenting. The killer...

News: Regulator to aid VAT recovery for wind-ups.
February 18, 2008... Byline: Tom Willetts The Pensions Regulator is investigating a change in the way it appoints statutory trustees to ensure schemes can claim back millions of pounds of VAT. It is estimated that around half of all trustees used by the...

News: ACA calls for key amendment to the pensions bill.
February 18, 2008... Byline: David Ricketts The Association of Consulting Actuaries' (ACA) final briefing to the pensions bill committee will urge a removal on the ban on conditional indexation. The pensions bill committee is due to debate 'new clause 5'...

News: Network Rail launches cost-sharing hybrid plan.
February 18, 2008... Byline: Kalpana Fitzpatrick Network Rail is to limit pension costs with the launch of a cost-sharing career average plan (CARE) for new employees. Only after the completion of five year service will new employees be able to opt into...

News: Aslef members strike over pensions wrangle.
February 18, 2008... Byline: Tom Willetts Nearly 200 train drivers represented by railway union Aslef are taking strike action after the breakdown of pension talks. The drivers, based at the Bletchley depot of train operator London Midland, are to strike...

News in brief.(Medical condition overview)
February 18, 2008... The Haringey and Waltham Forest pension funds have joined the Local Authority Pension Fund Forum. The forum, which now has 46 local authority fund members, promotes corporate social responsibility and governance in investments. The...

News: Euro funds miss GBP6bn in litigation payouts.
February 18, 2008... Byline: David Ricketts Pension funds are missing out on a potential share of $12bn (GBP6bn) in unclaimed litigation settlements in the USA, according to a class action specialist. A study by GOAL Group found class action cases carried...

News: Government to examine impact of PAs on means-tested individuals.
February 18, 2008... Byline: David Ricketts A study into means-testing and auto-enrolment into personal accounts is to be launched by the government. The research, which is to be carried out by the Department for Work and Pensions (DWP), will look at...

News: Youth will regret not saving today.
February 18, 2008... Byline: Tom Willetts More than half of people aged under 34 are not saving for retirement, according to a YouGov poll of nearly 2,000 people from across the UK. The survey found that young people in Scotland are the most likely to...

News: Nationwide clients must pay AVC fee.
February 18, 2008... Byline: David Ricketts Nationwide is pulling out of the additional voluntary contributions (AVC) market, but is leaving some pension schemes to pick up transfer costs. In a letter to schemes operating AVC accounts, Nationwide informed...

News: Buyout figures reliant on big schemes.
February 18, 2008... Byline: Tom Willetts A handful of high value pension schemes are responsible for the big growth in the insurance buyout market, according to research from Aon Consulting. The firm's latest quarterly buyout market survey found that...

News in brief.
February 18, 2008... The administration contract for the House of Commons Parliamentary Contributory Pension Fund has been awarded to pension services firm Rpmi. The contract, which starts in June, will provide administration services for the generous defined...

News: Tax cuts may confuse payroll and employees.
February 18, 2008... Byline: David Rowley Many employers are unprepared for tax changes that will impact tax paid on group personal pensions or stakeholder pension plans, according to consulting firm Origen. Income tax is being reduced from 22p to 20p on...

News: Good governance leads to fewer F&C objections.
February 18, 2008... Byline: David Rowley UK companies' improved corporate governance has led to activist fund manager F&C Investments making fewer objections to management proposals. F&C supported 97% of management proposals in the UK companies it...

News: PGI cracks UK market with mandate wins.
February 18, 2008... Byline: David Rowley High alpha equity specialist, Principal Global Investors, has won its first pension fund mandates in its first full year of operation in the UK. The US-headquartered global asset manager currently has around...

News: Facebook alternative fosters lively debate.
February 18, 2008... Byline: David Rowley Liability-driven investment (LDI) fees and the ethics of paying trustees are the hottest topics on a social networking site for trustees, according to AHC Consulting. Trusteeweb.co.uk, which was set up last year as...

News: Energy standards could force price of commercial buildings down.
February 18, 2008... Byline: David Ricketts New regulations that grade commercial property based on energy consumption could cut values, a property expert has suggested. Commercial buildings in excess of 10,000 sq m will have to be issued with an energy...

Current affairs: Q&A.
February 18, 2008... Byline: David Rowley Q: What is the purpose of the Pensions Policy Institute? A: It provides fundamental independent research into pension issues that span both the public and private sectors. The independence is very important...

Current affairs: One step forward and two steps back.
February 18, 2008... Byline: Steve Bee Two things. First, the government is pushing through yet another pensions bill at the moment that, among other things, is paving the way for around 10 million people to be automatically enrolled into pension saving...

The insider: Personal view - A rigorous quantitive approach has distinct advantages in volatile times.
February 18, 2008... Byline: Anthony Todd Investors have experienced a challenging start to 2008. Fear of a new and less benign economic environment is pervasive, market direction is difficult to predict and volatility has increased the complexity of...

The insider: Technical view - Emerging markets can avoid the pitfalls.
February 18, 2008... Byline: Nitin Mehta If we do not learn from our mistakes, we are doomed to repeat them. With that aphorism as a guide, there has been much analysis of the most recent financial crisis, in which the subprime credit markets in the US are the...