Pensions Week articles from June 2004

Pensions Week archives from June 2004

News: Councils review AVC ties with Nationwide.
June 7, 2004... Building society Nationwide is being reviewed by several pension funds after saying it will not provide legally-required benefit statements through its additional voluntary contributions (AVC) arm. Under new legislation, pension schemes are...

News: Govt set to give multi-employer schemes the OK.
June 7, 2004... The government is thought to be close to giving the go-ahead for the creation of multi-employer pension schemes run by employers from different industries. At present, it is possible only for associated employers to set up these schemes,...

News: Sears switches back to equities.
June 7, 2004... The GBP485m Sears Retail pension scheme has switched back into equities for the first time after pulling out of the asset class over two years ago. The scheme remained tight-lipped about the details of the changes, but confirmed the move...

News: Mixture of methods leaves financial reporting in a muddle.
June 7, 2004... The 'realistic' approach to reporting insurance company financial strength leaves analysts in more of a muddle than ever, according to academics. The method - developed in light of fears for with-profit fund security post- Equitable Life -...

Letters: An open letter from Richard Stroud: Multi-employer schemes.
June 7, 2004... I am the chairman of the NAPF multi-employer schemes working group. As many of you will know, we are involved in an initiative mentioned in the last Green Paper to see if we could work towards agreeing a way of running multi- employer schemes....

News: Lancashire Council switches to single global custodian.
June 7, 2004... The GBP2.4bn Lancashire County Council pension scheme has selected ABN Amro as its global custodian. The appointment follows the pension fund's decision to move to a single custodian. Lancashire previously used Citibank, Schroders...

News: Lewisham appoints Northern Trust.
June 7, 2004... The GBP505m London Borough of Lewisham pension fund has appointed Northern Trust as global custodian. As well as custody services, Northern Trust will provide performance measurement services. The assets were previously held with the...

News: PPF could become dumping ground for overseas companies.
June 7, 2004... Overseas companies with insolvent UK subsidiaries could dump their liabilities into the Pension Protection Fund (PPF) and get away with it. Lawyers say that while the PPF will protect members of a wound- up pension fund at an insolvent UK...

News: Clerical Medical makes 1% special offer to new investors.
June 7, 2004... Clerical Medical is offering to pay its own one-off contribution into customers' stakeholder and personal pensions. The life office said last week that it will offer new investors the extra allocation of 1% to single premiums of GBP3,000 or...

News: Alpha determined by fund diversity rather than manager expertise, says Intech duo.
June 7, 2004... Active fund manager performance could be determined by the amount of money that is concentrated among companies in the stock market more than by any other factor. When investor money is spread thinly across a wide variety of companies,...

News: Prudential kicks off National retirement Week.
June 7, 2004... This week marks the start of the second Prudential sponsored National Retirement Week. Pensions Week has teamed up with the Pru to give our readers the chance to win a fantastic prize of two tickets to the Euro 2004 final in Lisbon on 4 July....

News: Winterthur's new funds give investors asset allocation role.
June 7, 2004... Winterthur Life has launched five new multi-manager funds to primarily allow investors access to equity markets while offering more diversified risk and greater control. The company says the funds are aimed at investors and advisers who...

News: Webb backs action group.
June 7, 2004... Liberal Democrat MP Steve Webb has backed the claim of maladministration levelled at the government by the Pensions Action Group. He wrote to the parliamentary ombudsman, who has been asked by the group to consider the claim. In his...

News: Poor returns cancel out gains from interest rates.
June 7, 2004... Poor returns from both equity and bond markets cancelled out the positive effects of interest rate rises for UK pension fund liabilities in the first quarter of this year. UK defined benefit pension schemes saw an average fall of 0.1% in...

News: Hazell Carr pulls out of regional joint ventures.
June 7, 2004... Hazell Carr is pulling out of joint venture operations with its regional partners to focus on its outsourcing business with insurance companies, PW has learned. Hazell Carr had joint ventures in eight regions, four of which - Basingstoke,...

News: Russell/Mellon passes $4,000bn milestone.
June 7, 2004... Russell/Mellon, a provider of performance measurement services, said that it has crossed the $4,000bn mark in assets serviced for its more than 3,100 institutional investment clients located around the world. The investment assets serviced...

News: PIRC refutes claims by former M&S chief.
June 7, 2004... Corporate governance agency PIRC defended the governance industry from comments made by Luc Vandervelde, the departed head of embattled Marks & Spencer. Vandervelde told a newspaper that had he known what was in store for him, he would...

Insider: Expiry date.
June 7, 2004... My daughters recently entered my details into www.dateofdeath.com and I am rather pleased with the result - 28 March 2046 - not too many years short of my hundredth birthday. Unfortunately, I can't get a certificate guaranteeing I will live...

News: Employers feel impact of pensions saving gap.
June 7, 2004... Only 3% of employers think members of a defined contribution (DC) scheme have a good understanding of the funding levels required to build sufficient savings for retirement, according to a survey by consultant Hewitt Bacon & Woodrow. The...

News: Investment group claims hedge fund industry set for massive expansion.
June 7, 2004... The forecasts for global hedge funds assets under management could go through the $4,000bn (GBP2,200bn) mark by the end of the decade, claims Platinum Capital Management. The international financial investment group says current...

News: Headdon not 'fit and proper' to manage, says FSA.
June 7, 2004... The Financial Services Authority (FSA) has banned the former Equitable chief executive from holding a management role until 2010. The City watchdog said Christopher Headdon was not fit and proper to hold a significant management role at a...

News: Actuaries in 'keep it up' warning.
June 7, 2004... Actuaries have warned that the UK needs to deal with the issue of birth rates in order to avoid profound impacts on the economy and society over the next 50 years. If the number of babies born in the UK falls to as low as the current birth...

Ombudsman Watch.
June 7, 2004... Pontifications Regular readers of Ombudsman watch may have noted that over the past few weeks, I have spent more time pontificating on matters of general pensions interest rather than putting the latest ombudsman determinations under the...

Governance Watch: Antofagasta has only one independent director.
June 7, 2004... Antofagasta (AGM June 9), a mining and transport company mainly based in Chile, joined the FTSE 100 in March. The executive chairman, Antonio Luksic, and his family - Jean-Paul Luksic is deputy executive chairman - control 65.02% of the...

Spotlight: Multi-managers - talk or substance?
June 7, 2004... One of the biggest marketing efforts at the moment is in the field of multi- manager investing. At first sight it seems a great idea, spread your risk, get a better risk-return profile - but have multi-managers really been delivering this? And...

Opinion: Leader - Are simplification and confidence any closer?
June 7, 2004... The planning blight caused by several years of regulatory overhaul has officially ended, declared Steve Bee, head of pensions strategy at Scottish Life, recently (PW 24.5.04). As the pension and finance Bills trundle through parliament,...

Opinion: Personal View - Working toward the age of outsourcing.
June 7, 2004... Fund companies are under tremendous pressure to control costs, handle increased regulation and update technology, while remaining focused on managing money and serving clients. Investment operations outsourcing has long been heralded as a...

Opinion: Inside View - We must learn from the mistakes of the past.
June 7, 2004... The history of pensions legislation demonstrates that regulatory and legal initiatives to protect scheme members have failed repeatedly for three important reasons. First, they implement measures that respond to very specific issues without...

People on the move: Burgess goes global at CSAM.
June 7, 2004... Credit Suisse Asset Management (CSAM) has appointed Mark Burgess as global co-head of equities. As well as being responsible for balanced portfolios, he will lead the management of equities in Europe, Asia/Pacific and all multi-country...

People on the move: Nowell takes corporate marketing role at UBS.
June 7, 2004... Howard Nowell is to join UBS Global Asset Management, subject to approval from the Financial Services Authority, as director of institutional corporate marketing, part of the company's UK institutional business development team. He will...

People on the move: LCP names three new partners.
June 7, 2004... Actuarial consulting firm Lane Clark & Peacock (LCP) has announced three new partners, Neil Gordon, Robin Smith and Alasdair Mayes. Gordon joins from Australian law firm Allens Arthur Robinson as finance director, bringing experience in...

People on the move: NTGI boosts fixed income team with new appointments.
June 7, 2004... Northern Trust Global Investments (NTGI) has brought in three new members to its fixed income team in London, with two external recruits and an internal promotion. Marcelo Pesci has joined as a senior fixed income research analyst from...

News Just In... : OPEC oil threat to UK pension schemes.
June 7, 2004... UK pension schemes may suffer a backlash from the current Middle East oil crisis if oil prices continue to rise and economic growth slows as a result. The rise in oil prices to beyond $40 a barrel is causing concern in the financial...

News Just In... : Stakeholder overtakes DB as UK scheme of choice.
June 7, 2004... Less than half the companies in the UK now offer defined benefit (DB) pension schemes in what is a noticeable change from DB to defined contribution (DC) schemes, according to independent financial advisers Origen. Origen's employee...

News: Surrey seeks specialist help to end oe300m deficit.
June 14, 2004... The GBP1bn Surrey County Council pension fund has abandoned its active balanced asset management structure as it deals with a funding level that is feared to have fallen to as low as 60%. It has moved to a core-satellite specialist...

News: Blyth & Blyth takes legal action over funding shortfall.
June 14, 2004... Trustees of the collapsed Blyth & Blyth pension fund are taking legal action against the scheme actuary and the former directors of the Scottish engineering firm. The actuary, his former employers - Buck Consultants, which is now Mellon...

News: Foreign firms are stripping out UK assets, says Quarrell.
June 14, 2004... Foreign companies are seeking to escape their final salary commitments at UK subsidiaries, a leading lawyer says in this week's PW. John Quarrell, partner at legal firm Quarters, says: "In the last year I have been approached by employees...

News: Hedge funds pivotal in shaping destiny of the industry, says PwC.
June 14, 2004... Hedge fund managers can play a pivotal role in influencing regulators and the future destiny of the industry, financial services firm PricewaterhouseCoopers (PwC) said last week. The firm said hedge fund managers must use their influence to...

News: UK must focus on reducing the savings gap, says Raising Standards.
June 14, 2004... Too many people are relying on their property to provide them with an income in retirement. They are also storing up trouble by racking up masses of debt rather than saving for the long-term, Datamonitor, an analytical firm, claimed last week....

News: Little growth in level of local authority alternative investment.
June 14, 2004... The amount of money that local authority pension funds invest in alternative asset classes has grown by less than half a percent since 1995. Local authorities placed 0.8% of their investments in alternatives - ranging from hedge funds and...

News: Archers actress gives voice to Pensions Trust.
June 14, 2004... Actress Carole Boyd, who plays Linda Shell in BBC Radio's The Archers, has provided a voiceover for a spoken version of The Pensions Trust's annual report. The Pensions Trust, a multi-employer pension scheme for the charity and not-...

News: Mum's the word for Merrill Lynch.
June 14, 2004... Merrill Lynch, the investment bank, remained tight lipped over speculation last week that it was considering the sale of its investment management company, Merrill Lynch Investment Managers. Merrill Lynch has a policy of not commenting on...

News: Delaying retirement may be more beneficial, says Aon.
June 14, 2004... The government will have to increase the state pension age to 70 by 2030 if pensions are to remain as affordable as they are now. But what looks like bad news for workers, could actually see them significantly improve their living standards...

News: Compensation deducted from benefits may add insult to injury.
June 14, 2004... Compensation received from the Pension Protection Fund may be taken off of victims' means-tested benefits. Asked if this was the case recently by David Willetts MP, Tory work and pensions spokesman, Andrew Smith, the secretary of state for...

News: Insurance industry calls for more reforms than those proposed in the Pensions Bill.
June 14, 2004... The insurance industry voiced its dissatisfaction at the pensions reform proposals contained in the Pensions Bill last week. The Association of British Insurers (ABI) called for yet more reforms, which it said needed to be radical in order...

News: Four weddings, a funeral and the FSA.
June 14, 2004... A senior investment manager considers the recent decision by the Financial Services Authority (FSA) to seek a market solution on transaction costs as one of the industry's biggest successes of the past year. Speaking at the annual general...

News: JLT launches guidance service on 2006 legislation.
June 14, 2004... Financial consultant Jardine Lloyd Thompson (JLT) has launched a service to guide senior executives, partners and directors through the pensions legislation due to take place in 2006. JLT said that although there was a lot of information...

News: Hundreds run for the homeless.
June 14, 2004... Hundreds of City workers gathered last week to complete a 3.5-mile run for homeless charity, Crisis. Over 1,500 runners, including two from PW, participated in Crisis Square Mile Run, which took place in the heart of the City of London...

News: Global hedge fund market may exceed oe500bn.
June 14, 2004... Mercer Investment Consulting believes that the global hedge fund market will exceed the $1trn (GBP500bn) mark much sooner than predicted. The US Securities and Exchange Commission recently said that hedge funds could see $1trn dollars...

News: Tougher regulations will raise costs for employers.
June 14, 2004... Tougher regulation of the third-party administration business will result in yet more pension costs for employers. The Society of Pension Consultants (SPC) warned last week that a new European Union directive will raise the costs of running...

News: Royal London to withdraw from face-to-face selling.
June 14, 2004... Royal London, the company that owns pension provider Scottish Life and Royal London Asset Management, has said that it intends to withdraw from face-to- face selling. The plans are subject to consultation with employees but could lead to...

News: Watson Wyatt claims Bill could cost a lot more than it saves.
June 14, 2004... The Pensions Bill could cost companies over GBP400m a year rather than save them GBP80m. The government has said that firms will make huge savings under the Bill. But consultancy firm Watson Wyatt claimed last week that it will cost...

News: Terror threat leads to shift from UK equities.
June 14, 2004... The average UK pension fund returned 1.5% in the first quarter of 2004 and has grown by 22.6% over the 12 months to the end of March, according to The WM Company survey of UK private and public sector pension funds. According to the...

News: Policy view - Can property ever replace pensions?
June 14, 2004... Investing in property rather than pensions to pay for retirement is a hot topic in the personal finance press. We probably all know people who say they are relying on buy-to-let to provide their pension. The Pensions Policy Institute's latest...

News: Companies opt for alternatives over compensation.
June 14, 2004... Top UK companies will not compensate executives for the increase in tax they will have to pay as a result of the GBP1.5m lifetime allowance for pension savings. Research of FTSE 350 companies by consultant Watson Wyatt found over 90% of...

News: No support from Labour MP.
June 14, 2004... Labour MP Tony McWalter has refused to support campaigners in the lost pension scandal who want to take their case to the parliamentary ombudsman. He said it would be like going into battle in World War 1 riding horses. McWalter said...

News: Ombudsman watch.
June 14, 2004... Flying Concorde The story is told of a law firm most of whose marketing budget was spent sending the senior partner flying Concorde once a week. He had no meetings fixed at either end. Instead the plan was he would simply stroll down the...

News: Sentiment toward Asian markets low despite recent growth.
June 14, 2004... Fund manager sentiment about Asia is beginning to dip but broader emerging market portfolios are still turning out good numbers. Insight Investment, the fund manager owned by HBOS, has reduced its equity exposure to Asia, moving down to...

News: The Annuity Bureau beefs up brokerage & research services.
June 14, 2004... Annuity and drawdown specialist, The Annuity Bureau, says it has bolstered its research and brokerage services as it looks to capture more of the outsourced research market. The Bureau said it has seen an increased demand for specialist...

News: Martin Currie launches second Japan hedge fund.
June 14, 2004... Edinburgh-based fund manager Martin Currie is launching a second Japan hedge fund with an aggressive target return of 20% a year and with a volatility of 12% a year. The Martin Currie Daijiro Fund (Daijiro meaning 'vibrant second son')...

News: AXA predicts 9% return on equities.
June 14, 2004... Equities could deliver up to 9% returns in the medium term, predicts AXA Investment Managers. AXA noted that, based on analyst forecasts, the current estimated return on equities is currently 9.8%. AXA explained this bullish outlook...

News: Insight calls for better biodiversity risk management.
June 14, 2004... Most mining and other extractive companies are not taking enough steps to manage biodiversity risks, according to Insight Investment, which has published a benchmarking report on the topic. Biodiversity refers to the various organisms that...

Governance Watch: New chief executive for Shire Pharmaceuticals.
June 14, 2004... The former chief executive of Shire Pharmaceuticals Group (annual general meeting 6 June), Rolf Stahel, who resigned in March last year, received compensation of GBP1.3m (equivalent to 29 months' basic salary), a one-off pension contribution of...

Opinion: Leader - A different type of group pension.
June 14, 2004... Last week's appeal by Richard Stroud for more assistance for multi-employer pension schemes is an initiative which deserves support. Spreading the cost and the risk of a pension scheme over a number of employers makes good sense and could help...

Opinion: Personal View - Foreign firms should not walk away from their UK obligations.
June 14, 2004... In the last year I have been approached by employees of companies now ultimately owned by, in three cases American parents, and in one case Dutch, all overall solvent. Affairs and inter-company relationships have been obviously organised to...

Opinion: Inside View - Leaving behind the old legacy in favour of the new.
June 14, 2004... Who hasn't been told at some time: "The system doesn't hold the information in that way,"or "sorry, the system is down at the moment," or even "it will take some time to do that." The reality is that most of the time, you are hearing the...

Special Focus: Hedge funds - Intro.
June 14, 2004... It is a fact of pension fund investment that necessity is a fertile mother of, if not invention, then certainly innovation. As pension funds face problems in investing their assets, so an army of consultants and fund managers are quick to...

Special Focus: Hedge funds - Come rain or shine.
June 14, 2004... Now that summer has arrived, we can look forward to days of uninterrupted sunshine, cricket and tennis. But why is it that one still sees many people still carrying umbrellas? Well, because of the unpredictability of the British weather, people...

Special Focus: Hedge funds - Capturing A1 - Economics with investible indices.
June 14, 2004... The last two years has seen a significant move towards making hedge funds, and in particular fund of hedge funds (FoHF), more easily accessible, usable and measurable to meet the growing demands of institutional investors who have a higher...

Special Focus: Hedge funds - Company Profile - HFR Europe, Ltd.
June 14, 2004... Background Established in 1993 and headquartered in Chicago, the Hedge Fund Research (HFR) group is best known for its comprehensive and widely-used hedge fund data and index service. HFR's monthly series of index statistics, which cover...

Special Report: Local Authorities - The changing face of asset allocations.
June 14, 2004... Is the cosy world of local authority pension schemes about to be shaken up? We are close to seeing the results of their latest tri-annual review, covering the period to the end of March this year. A straw poll of chief investment officers in...

People on the Move: Schroders creates new role and Custard fills the spot.
June 14, 2004... Schroders, the UK-listed fund manager, has created a new role to lead its multi-asset solutions arm and appointed Curt Custard from Allianz Dresdner Asset Management. The role also includes the heading up of Schroders' multi-management...

People on the Move: Hurt joins Axa IM's fixed income team.
June 14, 2004... Investec Asset Management has lost a product specialist to Axa Investment Managers (Axa IM). Axa IM has appointed Craig Hurt as product specialist in its fixed income team. Based in the London office, he will report to Joanna Munro, head...

People on the Move: Sabel makes it seven at Hammonds.
June 14, 2004... Pensions law author John Sabel has joined legal firm Hammonds as a part-time senior pensions solicitor. Sabel, who wrote the first and second editions of Tolley's Pensions Handbook, joins Hammonds' London office from Ashurst. Sabel is...

News Just In... : Charities suffer double blow as abolition of tax credit hurts income streams.
June 14, 2004... Charities have not recouped losses from investments that were caused when advanced corporation tax credits were scrapped from charity and pension fund investment in 1997. The government originally thought that scrapping the tax credit...

News Just In... : Allied takes protest to Welsh Assembly.
June 14, 2004... John Benson, a former member of the Allied Steel and Wire scheme, is holding a protest march which will go to the Welsh Assembly on Tuesday this week. Benson was one of the many who lost his entire pensions savings when the company became...

News Just In... : Johnstons appoints MHRC for admin.
June 14, 2004... Knitwear manufacturer Johnstons of Elgin has appointed Mercer Human Resource Consulting (MHRC) to provide administration, actuarial, investment and benefits consulting services to its pension arrangements. The GBP22m defined benefit scheme...

News: New stakeholder cap still too low for some providers.
June 21, 2004... Insurers will make just GBP4 extra a year on GBP100 per month invested in a stakeholder pension after the government said stakeholder charges would rise by half a percent last week. After three years of arguing over the right to levy higher...

News: Public sector liabilities soar to oe470bn 2 deck please.
June 21, 2004... The public sector is carrying unfunded pension liabilities worth GBP470bn, according to Christine Farnish, head of the National Association of Pension Funds. That figure is the total cost of retirement benefits for nurses, doctors,...

News: With-profits AVC equity exposure half that of unit-linked AVCs.
June 21, 2004... Equity allocation in with-profits additional voluntary contribution (AVC) funds have dropped to half the equity allocation for unit-linked AVCs, due to new reporting rules. Of 15 providers, the average allocation to UK and overseas equities...

News: FSA's menu is too complex, says AIFA.
June 21, 2004... A menu of prices for customers of financial advice companies that has been proposed by the Financial Services Authority (FSA) is too complex but a good idea, the Association of Independent Financial Advisers (AIFA) said. Paul Smee,...

News: Comet appoints Standard Life for stakeholder.
June 21, 2004... Electrical retailer Comet has appointed Standard Life as the provider for its stakeholder pension plan. Comet, which is part of Kesa Electricals, has around 4,000 employees eligible to join the pension plan, which will also be open to all...

News: Lothian appoints GSAM to oe100m mandate.
June 21, 2004... The GBP1.9bn Lothian Pension Scheme has appointed Goldman Sachs Asset Management (GSAM) to manage a GBP100m US equity mandate, along with two other managers who were re-appointed for a further US brief and a Pacific equity mandate. The...

News: McLaren leaves Britannic in restructure.
June 21, 2004... A senior management restructure has resulted in one director-level job loss at Britannic Asset Management, the GBP14bn Edinburgh-based fund manage-ment arm of insurance group Britannic plc. Margaret McLaren, investment director for Europe,...