Pensions Week articles from June 2008

Pensions Week archives from June 2008

Hedge funds' value called into question.
June 2, 2008... Byline: David Ricketts Two leading pension funds have hit out at hedge funds for returning lacklustre performances during recent volatile market conditions. The BAE Systems Pension Fund and the London Pensions Fund Authority (LPFA)...

PPF calculation is a blow to scheme budgets.
June 2, 2008... Byline: David Ricketts The levy scaling factor set by the Pension Protection Fund (PPF) will see some pension schemes' risk levy increasing by 235% more than they originally budgeted. The PPF has announced that the levy scaling factor...

The hazy world of hedge funds.
June 2, 2008... Byline: David Rowley - Editor, Pensions Week Hedge funds are a bit like the government, in that they can be blamed for a lot of things and are expected to lump it. An industry that chooses to base itself in Mayfair is probably fair game,...

Industry slams PPF over shock levy rise.
June 2, 2008... Byline: David Ricketts Consultants have been unanimous in their criticism of the surprise hike in the Pensions Protection Fund's (PPF) scaling factor. All voiced concern about the uncertainty it will cause for sponsoring employers and...

Unis must make plans to cope with rising DB costs.
June 2, 2008... Byline: David Ricketts University staff could face working beyond normal retirement age or sharing the cost of future pension increases, under proposals set out in a new report. The Thompson report, which has been issued to...

'Wronged' retiree takes case to ombudsman.
June 2, 2008... Byline: Owen Walker A scheme member who saw his potential pension slashed from GBP66,000 a year to GBP17,000 by the PPF is seeking redress through the Pensions Ombudsman. Paul Hughes claims that his pension scheme bypassed plan rules...

Volatility triggers golden annuity rates.
June 2, 2008... Byline: Charlie Thomas Annuities providers have hailed the credit crunch as a driving factor behind the best rates since 2004. Higher interest rates as a result of faltering sterling have helped, pushing providers to offer the best...

News in brief.
June 2, 2008... The GBP90m Innovia British Pension Scheme has appointed Jagger & Associates to act as investment adviser. Jagger & Associates director Simon Jagger said: "Innovia corporate trustees have recognised the need to examine investment issues...

Trustees cast doubt over DB deficit expectations.
June 2, 2008... Byline: David Ricketts More than a quarter of defined benefit (DB) schemes face falling foul of the Pension Regulator's expectations that scheme deficits will be cleared over 10 years. This follows a survey of trustees carried out by...

O'Brien backs the extension of regulator powers.
June 2, 2008... Byline: David Ricketts The Pensions Regulator's extended powers, given to issue companies with contribution notices, have been defended by the minister for pension reform. Speaking to PW, Mike O'Brien said that despite some concerns...

Letter.
June 2, 2008... Paternoster calculates that the cost of securing pension liabilities rose by 3% in April ('DB liability costs see a rise', PW 26.05.08). However, as any shopper knows, affordability is not a function of price alone. It also depends on how...

Scottish Widows in negligence wrangle.
June 2, 2008... Byline: David Ricketts Scottish Widows has played down speculation that it is to receive a legal challenge over advice it gave to around 100 final salary pension schemes. A spokesperson said it had not received any complaint or dossier...

PIC secures GBP65m of assets in DB buyout first.
June 2, 2008... Byline: Tom Willetts Pension Insurance Corporation (PIC) has completed its first full defined benefit pension scheme buyout deal. The insured offshoot of Pension Corporation, which captured the Telent, Thresher and Thorn pension...

News in brief.
June 2, 2008... Northern Trust has been selected by Hargreaves Lansdown to provide custody and fund administration for around GBP1bn in fund-of-funds assets. Commenting on the appointment, Toby Glaysher, head of Northern Trust's UK global fund services...

FSA pledges to iron out issues with RDR.
June 2, 2008... Byline: Charlie Thomas The Financial Services Authority (FSA) is seeking to reassure the pensions market that it understands the challenges the retail distribution review (RDR) provides. In response to Simon Morris' criticism of the...

Fixed rate annuity pay under threat from inflation hikes.
June 2, 2008... Byline: Tom Willetts Soaring inflation could slash the purchasing power of pensioners with fixed rate annuities by a fifth over the next five years. Around 60% of DC members opted for a fixed rate annuity during the low inflation of...

CFA to launch global trustee ethics code.
June 2, 2008... Byline: David Rowley A new international code of pension trustee ethics is hoped to spread best practice around the world. On June 24, investment standards organisation the CFA Institute will launch the code, created using input from...

Equity values to rise as oil prices rocket.
June 2, 2008... Byline: David Ricketts Continued hikes in the price of oil will affect equity valuations as demand continues to outstrip supply, industry experts predict. Robin Batchelor, manager of BlackRock's BGF World Energy Fund, said equity...

Economic factors show likelihood of recession in UK.
June 2, 2008... Byline: Charlie Thomas Weak sterling, high oil prices, increasing levels of debt and poor growth levels are contributing to a probable UK recession, according to Legal & General. James Carrick, investment strategist at L&G Investment...

Top-down gets thumbs up for flexibility.
June 2, 2008... Pension schemes should review their investment strategies to prepare themselves for a prolonged period of volatility in global equity markets. Andrew Cole, member of the strategic policy group at Barings Asset Management, said pension...

Bigger picture.
June 2, 2008... Byline: Charlie Thomas Value at Risk (VaR) has received a rough press over the past decade. Having emerged in 1994 as the gold standard for explaining risk assessment to those not mathematically-minded, it was then denounced as a...

The dangers of auto-enrolment.
June 2, 2008... Byline: Steve Bee The pensions world we're heading for in 2012 looks like it will be very different to the world we live in at the moment. The private sector final salary schemes that have been so dominant in the workplace for nearly half...

Personal view - High Court decision protects directors of trustee companies from claims.
June 2, 2008... Byline: Nicholas Heaton Being a trustee of a pension scheme is an increasingly demanding role, which potentially involves being personally exposed to claims if something goes wrong. This undoubtedly deters some people from agreeing to act...

Technical view - Solvency II: the impact on UK schemes.
June 2, 2008... Byline: Mark Duke The implementation of Europe-wide capital adequacy regulation Solvency II, set to take place by 2012, will have a significant impact on both the capital structures of insurance companies and the way risk is managed. ...

Governance - It may be time to rein in executive appetite.
June 2, 2008... The last few weeks has seen another round of discussion take place about pay, particularly in the financial sector. A wide range of commentators, from Bank of England governor Mervyn King to Confederation of British Industry (CBI)...

Notice board - NAPF training and publications.
June 2, 2008... Supporting trustees The NAPF has a range of courses that support the training needs of trustees. Courses are designed to suit everyone from newly appointed trustees through to those looking for more in-depth knowledge and understanding....

View from the bridge.
June 2, 2008... Byline: Norman Russell What drives actuaries? The question I am asking this week is what drives your actuary? It is not 'What does your actuary drive?' The answer to the second question may be revealing; would you rather your actuary...

Beginner - Hedge funds - Beginners' level.
June 2, 2008... Private and institutional investors have traditionally used long-only funds that invest in equities, bonds and/or cash as the foundations of a balanced investment portfolio. However, they are increasingly turning to hedge funds, favoured for...

Introduction.
June 2, 2008... Byline: David Rowley - Editor, Pensions Week A fund that can weather all types of economic performance is a fine thing. But what does it actually look like? In the first article in this special focus, fund managers and investment...

Weathering the stock storm.
June 2, 2008... Byline: Martin Fagan It was Billy Connolly who said there was no such thing as bad weather - just the wrong sort of clothes. The same can be said of investing: providing you avoid the spectacularly dumb punts, there's no such thing as bad...

A fund for all seasons.
June 2, 2008... Byline: Paul Moody The rush to close final salary, or defined benefit (DB), pension schemes to new and existing members, has increased the number of employees that now rely on defined contribution (DC) schemes to secure their retirement...

Barton becomes chairman of ACA.
June 2, 2008... Byline: Tom Willetts The Association of Consulting Actuaries (ACA) has elected Keith Barton as its new chairman. He has worked at Hewitt Associates for 30 years and is also chairman of the firm's staff pension fund. Barton said...

Going places.
June 2, 2008... Lace sews up European strategy at Mercer Mercer has made Crispin Lace a principal and senior investment consultant to boost its investment consulting business. Based in London, Lace will be a member of the firm's European policy group...

Top 4 moves.
June 2, 2008... 01 - Andrew Lawley OLD - Lawley was head of consultant relationships in Credit Suisse's UK institutional distribution team NEW - He joins emerging market specialist Mirae Asset Global Investments as head of UKdistribution and global...

Schemes may recoil at cost of risk-sharing.
June 9, 2008... Byline: Tom Willetts The cost and complexity of risk-sharing may deter many schemes from introducing it, according to lawyers. In a consultation paper, the Department for Work and Pensions is seeking views on allowing conditional...

Trustees ignore DB fund closure responsibilities.
June 9, 2008... Byline: Charlie Thomas Too many trustees of closed defined benefit schemes are putting off the inevitable 'end game' for their schemes, according to a report from Deloitte. The report states that, 66% of the 37 trustees asked were not...

Getting wind of a daring fund.
June 9, 2008... Byline: David Rowley - Editor, Pensions Week One of the first truisms about pensions I ever heard was that pension trustees are innately conservative, and move with all the speed of an aircraft carrier undergoing a 360-degree manouevre. ...

BBC fund banks on renewable energies.
June 9, 2008... Byline: David Rowley The BBC Pension Fund stands to gain from a big investment in wind and solar power as demand for conventional energy outstrips supply. A recent report issued by the fund shows that six of its 100 biggest investments are...

Provider delays could cause huge tax liabilities.
June 9, 2008... Byline: David Ricketts Employees with large pension pots face being hit with tax penalties due to lengthy delays by pension providers, according to Watson Wyatt. The danger affects those who have gone over the lifetime allowance,...

Levy increase impact 'clearly exaggerated'.
June 9, 2008... Byline: David Ricketts The Pension Protection Fund (PPF) has admitted to "surprise" over the need for a sharp rise in its scaling factor. Partha Dasgupta, chief executive of the PPF, said despite criticism of its decision to raise the...

IMA demands more clarity over conflicts of interest.
June 9, 2008... Byline: David Rowley The Investment Management Association (IMA) has urged all external consultants of pension fund trustees to disclose conflicts of interest. Responding to the the Pensions Regulator's consultation Conflicts of...

Letter.
June 9, 2008... In his letter of June 2, 2008, John Ball correctly asserts that affordability is not only about cost but also about what you have to spend. However, a buyout strategy that depends on strong equity investment returns coupled with low annuity...

News in brief.
June 9, 2008... Scottish Widows is seeking legal advice over the conduct of the Actuarial Review Company (ARC), following allegations it gave negligent advice to pension schemes. Scottish Widows said it has had no contact from ARC, despite requests to...

PIC secures partial DB buyout deal with Delta.
June 9, 2008... Byline: Tom Willetts Steel products manufacturer Delta has offloaded some of its defined benefit liabilities in a partial buyout deal with Pension Insurance Corporation (PIC). Under the terms of the deal, PIC will take on the...

Devon ditches Capital after 'lag' in portfolio results.
June 9, 2008... Byline: Charlie Thomas Capital International has been sacked as fund manager by Devon County Council Pension Fund. Committee members became concerned after witnessing poor returns for their pension funds and elected to terminate the...

PAs boost auto-enrolment at company schemes.
June 9, 2008... Byline: Tom Willetts Half of all employers are likely to auto-enrol staff into their company pension schemes before the implementation of personal accounts in 2012. A survey from Capita Hartshead found that 26% of employees were not...

Buyout discounts are distorting the market.
June 9, 2008... Byline: Tom Willetts The surge of activity in the buyout market is unsustainable because terms accepted by buyout firms are too low, Punter Southall Transaction Services has warned. A report from the firm found that temporary discounts...

First minister pensions aligned with Scottish MPs.
June 9, 2008... Scotland's first minister and presiding officer will no longer be entitled to more pension provisions than other members of Scottish parliament. A reform document reviewing the 1999 pension schemes brings several aspects of the scheme in...

News in brief.
June 9, 2008... Close to half of all small to medium-sized pension funds do not have a target or expected return for their portfolios. Research carried out by Barclays Global Investors (BGI) shows that only 39% of such schemes have targets in place. ...

Nationwide fund feels heat from credit crunch.
June 9, 2008... Byline: David Rowley The Nationwide Pension Fund has taken an above-average hit from the credit crunch due to its active currency portfolio and an underperforming equity manager. But the fund is well placed to gain value from its shift...

The rise of fiduciary management is signalled by SEI deal.
June 9, 2008... Byline: David Rowley SEI is heralding its appointment as fiduciary manager for a large Dutch fund as a sign of things to come in the UK. Its appointment to manage portfolio structure and select, monitor and replace managers at Bpf...

Means-tested top-ups panned by workers.
June 9, 2008... Most UK workers believe it is unfair that many individuals have their basic pension topped up with means-tested benefits. Research from pensions provider B&CE Benefit Schemes found 59% of workers thought it was unfair on those who have paid...

Emerging markets avoid global crisis.
June 9, 2008... Byline: David Ricketts Cash-rich emerging market economies are staving off the risk of a global recession according to a leading boutique fund manager. Emerging markets specialist, Hexam Europe, which was founded with expertise from...

Majedie credits fees as crucial to equities success.
June 9, 2008... Byline: David Rowley Majedie Asset Management has hailed its outperformance on UK equities as a vindication of its use of performance fees. The UK equity boutique has GBP4bn of assets under management and recently announced figures...

Equity firm capitalises on Russian growth.
June 9, 2008... Byline: David Ricketts East Capital has launched a property fund to take advantage of growing investment opportunities in Russia. The closed-end fund, which will be managed by East Capital Private Equity, will invest in shopping...

Switch over.
June 9, 2008... Byline: Tom Willetts Few defined benefit (DB) pension schemes have dared to upset predictable investment thinking and shun an allocation to bonds, an asset class that has underpinned scheme investment strategies for decades. Virtually...

One in, one out for pension regulation.
June 9, 2008... Byline: Clive Gilchrist The overwhelming majority of new defined contribution schemes are contract- based rather than under trust. It is hardly surprising; companies, though they may not recognise the term, are engaging in 'regulatory...

Personal view - The government must make public sector debts tradable to close deficit.
June 9, 2008... Byline: Toby Nangle Over the past decade, a private pension has increasingly meant a defined contribution (DC) pension, while public sector pensions have so far escaped any move away from defined benefit (DB). Although spiralling costs...

Technical view - Investing time in good governance.
June 9, 2008... Being a pension fund trustee could be regarded as a particularly thankless task. As if acting according to the trust deed, scheme rules and the legal framework surrounding pensions was not enough, they have a much broader requirement: to act...

Governance - US engagement model strives towards the UK.
June 9, 2008... Byline: Tom Powdrill The Sunday Times recently ran an interesting piece on outgoing Vodafone chief executive Arun Sarin. Notably, among the reflections on his past five years in the job, Sarin also made some rather critical comments about...

Notice board - NAPF events and training.(Conference news)
June 9, 2008... NAPF annual conference & exhibition: Better knowledge for better pensions Scottish Exhibition & Conference Centre, Glasgow October 8-10, 2008 James Purnell, secretary of state for work and pensions, and professor Lord Robert...

My life outside pensions.
June 9, 2008... Byline: Stuart Southall On a weekday lunchtime there is a fair chance that you could find Stuart Southall in one of the many specialist art dealers that dot the West End of London. Such is his status in the world of etchings that, on...

Intermediate - Hedge funds - Intermediate level.
June 9, 2008... Once investors have made the decision to add hedge fund exposure to their investment portfolio, they face a dazzling array of choice. With around 10,000 individual hedge funds to choose from, selecting the most appropriate investment for their...

Introduction.
June 9, 2008... Byline: David Rowley - Editor, Pensions Week The lure of amazing returns from emerging markets is eating into UK equity allocations. The global macroeconomic investment strategies that consider demand for minerals, energy and food are again...

A place in the fund.
June 9, 2008... Byline: Gill Wadsworth Hefty allocations to domestic equities have long characterised UK pension fund portfolios. The irresistible mix of outperformance delivered through a familiar market earned UK equities a prime position in pension...

Pole position.
June 9, 2008... Byline: Leigh Harrison Inferior economic growth, overconcentration in low growth sectors, a weak currency, lacklustre fund performance, liability matching - there are seemingly plenty of reasons why investors might reduce their weightings...

Actuarial trio make partners at Barnett.
June 9, 2008... Byline: Tom Willetts Barnett Waddingham has promoted Andrew Roberts, Ed Spencer and Nick Griggs to partners. Roberts is a qualified actuary and has been advising on pension arrangements for directors and high net worth individuals...

Going places.
June 9, 2008... F&C Lynes up key role for global consultant F&C Investments has appointed Julian Lyne as head of global consultants to develop its presence in the third-party institutional market. Lyne joins from HSBC Investments, where he worked as...

Top 4 moves.
June 9, 2008... 01 - Keith Barton OLD - Barton worked at Hewitt for 30 years NEW - He is elected as the chairman of the Association of Consulting Actuaries Tel: 020 7382 4594 02 - Crispin Lace OLD - Lace was senior investment consultant...

Local authority nightmare over ill-health delay.
June 16, 2008... Byline: David Rowley Local authority employees are facing severe delays in receiving ill-health pensions following the refusal of some doctors to process new claims. The delays are caused by an impasse between doctors and the...

Scottish Widows taken to court for mis-selling.
June 16, 2008... Byline: David Rowley Scottish Widows has been served with a court summons over the alleged mis- selling of funds to a final salary scheme. The Actuarial Review Company (ARC) confirmed the summons was issued shortly after news broke of...

Most HSBC staff better off.
June 16, 2008... Byline: David Rowley - Editor, Pensions Week Can anyone tell me if they have seen a news story anywhere that welcomes the fact that 40,000 HSBC employees are getting a better pension deal? Currently these employees get a 4%-6% employer...

HSBC to bolster DC payouts for staff.
June 16, 2008... Byline: David Ricketts HSBC is planning to double its pension contributions for thousands of its employees to better its recruitment and retention rates. Currently, around 40,000 of its employees in its defined contribution (DC) scheme...

Pension pots plundered by new pensioners.
June 16, 2008... Byline: Charlie Thomas A poor understanding of inflation and longevity is leading to pensioners giving away up to a quarter of their pension pot upon retirement. Research carried out by Prudential has revealed that on average...

Equity release should be pushed as annuity option.
June 16, 2008... Byline: Charlie Thomas Employees should be informed about equity release from their homes within the the full range of annuity open market options (OMOs), according to Living Time. The comments follow media reports from equity release...

Group Sipps to open up to protected rights.
June 16, 2008... Byline: David Rowley Protected rights will be allowed into group self-invested personal pensions (Sipps) from October, the Department for Work and Pensions (DWP) has confirmed. While the full response to its consultation on protected...

News in brief.
June 16, 2008... Capital International has failed to retain another UK pension fund equity mandate. The GBP2.14bn Hertfordshire County Council pension fund has dropped the fund manager from a GBP363m portfolio. The scheme has now appointed JPMorgan...

Risk-sharing proposals must avoid complexity.
June 16, 2008... Byline: Tom Willetts The pensions industry will squander valuable time and money in the shift to risk-sharing unless it is kept simple, according to pension managers. The Department for Work and Pensions is seeking views on allowing...

PPF outsources liability calculation work.
June 16, 2008... Byline: David Ricketts The Pension Protection Fund (PPF) has appointed ExactVAL to carry out valuation work. ExactVAL, the newly set up actuarial valuation firm, will be responsible for both the valuations of the PPF and ongoing...

Risk-sharing must be embraced to save final salary.
June 16, 2008... Byline: David Rowley The pensions industry faces losing the chance to stem the closure of defined benefit (DB) pension schemes unless it supports the case for risk-sharing. Ian Farr, immediate past chairman of the Association of...

Letters - Hedge funds are a plus for pension schemes.(Letter to the editor)
June 16, 2008... I was perplexed when I read the Pensions Week front page article 'Hedge funds' value called into question' (PW 02.06.08). The piece quoted two non-hedge fund investors; it's a pity that the views of some of the many UK pension schemes that...

News in brief.
June 16, 2008... Advisers should not hold sensitive governance data about pension schemes, a survey has found. The study, from governance software firm eShare, found that two-fifths of schemes were worried that advisers would try to sell them additional...

Over-65s opt to make further pension savings.
June 16, 2008... Byline: David Rowley Employees who choose to work over the age of 65 are increasingly taking the opportunity to build up their pensions further. The latest figures from the Family Resources Survey, published by the Department for Work...

MetLife launches lock-in pension plan.
June 16, 2008... Byline: Charlie Thomas A personal pension plan that offers both capital and income guarantees has been launched by MetLife Europe. The unit-linked retirement portfolio is claimed to be the only preretirement product on the market to...