Pensions Week articles from March 2003

Pensions Week archives from March 2003

News: Strathclyde rise despite surplus.
March 3, 2003... One of UK's largest pension funds has reported a 108% funding level, but will still increase employer contribution rates to meet future liabilities. The GBP4.5bn Strathclyde fund, which received its local authority valuation report...

News: VAT costs are unacceptable, NAPF tells Customs & Excise.(value added tax, National Association of Pension Funds)(Brief Article)
March 3, 2003... Pension schemes are losing nearly half of their VAT charges paid on external fund management fees every year, a new survey of funds shows. David Gould, director of investment at the National Association of Pension Funds (NAPF), which...

News: Liberators to lose their freedom.(Brief Article)
March 3, 2003... Two Midlands-based financial advisers involved in a pensions liberation scam, were sent to jail last week following sentencing at Oxford Crown Court. The judge sentenced Stephen Clive Russell, age 61 from Banbury, to four years in prison...

Pensions in Crisis conference: Green paper will encourage last minute saving, says Fernandes.
March 3, 2003... Proposals in the government's green paper on pensions will do nothing to encourage people to save, according to senior level industry figures who gathered last week for the Pensions in Crisis conference. Instead, the proposals will...

Pensions in Crisis conference: Altmann lashes out at GDP pensions spending.(Ros Altmann)(Brief Article)
March 3, 2003... Ros Altmann, a pensions consultant who has advised Downing Street, said that the green paper showed shocking government complacency if it thought that spending only 5% to 6% of gross domestic product (GDP) on the basic state pension by 2050 was...

Pensions in Crisis conference: Means-tested claims would prove costly.(Brief Article)
March 3, 2003... Newcastle MP Jim Cousins admitted that if all pensioners claimed the means- tested benefits they are entitled to, the costs would become "extraordinarily expensive." "The minimum income guarantee (MIG) and the pensions credit are only...

News: Watson Wyatt assumes realistic 6% for current equity returns.(Brief Article)
March 3, 2003... Actuarial consultancy Watson Wyatt has revealed that it is currently using 6% as its assumed realistic annual rate of return for equities in its funding valuations to calculate the contributions required by UK pension funds. The figure is...

News: Russell takes the wheel of Vauxhall study.(Frank Russell)(Brief Article)
March 3, 2003... Vauxhall is likely to boost its bond investment after its asset liability study, the scheme said. The closure of its Luton plant last year had a major impact on the demographics of the scheme membership at the GBP910m pension fund,...

News: West Yorks' EDM software offers multi-tasking.(Brief Article)
March 3, 2003... The West Yorkshire Pension Scheme has updated its file management system from microfiche to electronics. The newly installed electronic document management (EDM) and workflow system will enable users to view all files electronically. ...

News: Brown attacks A-day delay.(Grahma Brown)
March 3, 2003... Barnardo's pensions manager Graham Brown has attacked the insurance industry over its inability to meet the April 2004 deadline for A-day, the planned start of the new, simplified tax regime, outlined in the recent Inland Revenue proposals. ...

News: NAPF measures up to Myners for annual conference.(National Association of Pension Funds)(Brief Article)
March 3, 2003... The NAPF will hold its annual investment conference from 12-14 March at the Edinburgh International Conference Centre. The theme of Measuring up to Myners will form an integral part of the conference, with a keynote address by the financial...

News: Standard Life seeks safety in waiver.
March 3, 2003... Standard Life has said it will apply to the regulator for permission to waive rules about minimum capital holdings, due to concerns about the possibility of a major market setback if a war with Iraq goes ahead. The insurer's move follows a...

News: Standard & Poor's defends tough line on rating deficits.
March 3, 2003... Standard & Poor's (S&P), the rating agency, defended itself last week against accusations that its tough line on companies with gaping pension fund deficits is affecting bond prices. S&P recently carried out an extensive review of the...

News: S&P won't change Pru negative rating.(Standar and Poor's, Prudential)(Brief Article)
March 3, 2003... Standard & Poor's has stated that it does not intend to change its AA- /Negative/A-1+ rating of Prudential, following the insurer's reported GBP145m bottom line net loss and 2% increase in 2002 group operating profits to GBP1.13bn. The...

News: Hermes takes control of MEPC.(Hermes Pensions Management, )(Brief Article)
March 3, 2003... Hermes Pensions Management has agreed terms with GE Real Estate to purchase GE's 50% equity stake in property company MEPC on behalf of British Telecom Pension Scheme. The move gives Hermes full control of MEPC. Hermes and GE took MEPC...

News: Charities swing to active management.(Brief Article)
March 3, 2003... Charity fund management is moving towards active management, a survey by JPMorgan Fleming has found. Only 13% of charities who responded to the survey said that they use tracker funds. The survey also found that fund performance is key...

News: Don't blow it, move to bonds.
March 3, 2003... "Pension funds have taken so much risk that they've blown it," according to Mark Capleton, director of rates strategy at Barclays Capital. Speaking at the launch of the company's annual equity-gilt study, which provides data and analysis...

News: Euraplan offers free software.(Brief Article)
March 3, 2003... Software provider Euraplan is offering its OpenAir systems - used for investment and accounting - for a nominal fee following a pricing re- structure. Euraplan said it recognised pension funds' budgets were constrained in the current...

News: Give tax breaks to middle England, says study.
March 3, 2003... Aberdeen Asset Managers has backed calls by an independent pensions adviser to Downing Street to give more tax breaks to middle England. Dr Ros Altmann, an adviser to 10 Downing Street as well as a governor at the London School of...

News: Schemes indirectly biased.(against women)(Brief Article)
March 3, 2003... Occupational pension schemes are indirectly biased against women because their savings are influenced by their discriminatory lower wages, says the actuarial profession. The actuaries - responding to the House of Lords' select committee on...

News: Maestro - It's a matter of principle.
March 3, 2003... The Inland Revenue proposals accompanying the green paper have received more attention than the green paper itself. This is partly because the new tax regime will mainly affect senior decision makers, and partly because much of the green paper...

News: MVA penalty warning to retirement deferrers.
March 3, 2003... Some of the UK's biggest insurance companies are applying exorbitant penalties to individuals who defer taking their personal pension benefits as they approach retirement. Insurers have been applying penalties to the funds of people who...

News: Final salary closure may trigger two strikes.
March 3, 2003... The Transport & General Workers Union (T&G) raised the threat of strike action at two blue-chip companies over changes to final salary pension arrangements. Last week the union demanded urgent talks with gas company BOC after hearing that...

News: Ombudsman Watch.(Column)
March 3, 2003... "Crazy Actuaries" Rest assured, all my actuary friends out there, the epithet "crazy" in the headline is not mine. It is from a piece by Martin Dichson (martin.dicson@ft.com) in his recent Lombard column. He was talking about a key current...

News: Ombudsman Watch - Ombudsman watch, February 24 - Correction.
March 3, 2003... To avoid Norman's libel lawyer coming after PW, we wish to point out that owing to a unfortunate mix-up, a piece written by someone else was printed in place of the article Norman submitted last week. PW regrets any confusion caused, but is...

News: Pensions stable in rocky markets.
March 3, 2003... Pensions sales remained stable in 2002, despite plunging stock markets and an increasingly competitive sales environment, the Association of British Insurers (ABI) said. New business sales were up by 1% on 2001, from GBP11bn to GBP11.1bn....

News: Events.
March 3, 2003... NAPF in Scotland NAPF Investment Conference 2003 takes place on 12 to 14 March 2003 at the Edinburgh International Conference Centre. Speakers include financial secretary, Ruth Kelly, and Derek Higgs, author of the review into the role...

News: Pirc aims for more transparency.(Pensions Investment Research Consultants)(Brief Article)
March 3, 2003... Corporate governance body Pensions Investment Research Consultants (Pirc) has updated its voting practices to reflect the outcome of regulations on directors' remuneration, and the Higgs and Smith reports. Under the 2003 shareholder voting...

News: 350 IFA jobs axed after Chase/MX merger.(Chase de Vere Investments, MX Financial Solutions)(Brief Article)
March 3, 2003... Bank of Ireland is to shed 350 jobs following the merger of its two UK firms of independent financial advisers (IFAs). Under the restructuring, two fifths of its workforce will be made redundant at Chase de Vere Investments and MX Financial...

News: Spoilt for fund choice at Canada Life.(Brief Article)
March 3, 2003... Canada Life had added 12 funds and three new external fund management groups to its life and pension products' open architecture. This increases the choice of internal and external funds to 54, and external fund managers to 10. Included in...

News: US funds post positive fourth quarter returns.
March 3, 2003... US pension funds experienced gains in the fourth quarter of 2002, with a median return of 4.7% in the corporate sector and 4.8% for public plans, despite high weightings towards equities. The results compare with recent fourth quarter data...

News: oe33m property portfolio opens to retail investors.(Brief Article)
March 3, 2003... A property investment vehicle for pension schemes and other institutions is opening up to retail invetors. Pinder Fry & Benjamin is raising up to GBP33.3m from retail investors to invest, alongside ING Insurance and five other...

News: Equity index tracker funds too risky, says Talbut.(Robert Talbut)(Brief Article)
March 3, 2003... A fund with weightings in high-yield bonds is likely to return the same as an index-tracker investing in equities but with less risk, said Robert Talbut, chief investment officer of ISIS Asset Management. Last week Talbut moved to label...

News: Govett US Bear Fund grows 64% in three years.(Brief Article)
March 3, 2003... Govett Investments said interest in its US Bear Fund has increased due to the unstable geopolitical situation and the resulting volatile markets. Govett said the fund has risen 64% over three years on a bid-to-bid basis against a falling...

News Analysis: Taking the first steps.
March 3, 2003... Evidence last week suggested that almost two years after the much publicised Paul Myners review of institutional investment, nearly all pension schemes are taking steps to implement - or have already implemented - the recommendations. The...

News: Complex rules pile the pressure on advisers.
March 3, 2003... Financial advisers and other regulated firms are increasingly anxious and overburdened, a leading industry figure claimed. In his annual report published last week, Donald Brydon, chairman of the Financial Services Practitioner Panel, said...

Spotlight: The return of the small managers.
March 3, 2003... Do you prefer shopping in a supermarket or a boutique? It's becoming an increasingly important question for UK pension scheme trustees and their investment consultants. Big asset managers, one stop shops, are under acute financial strain, with...

Governance Watch: Always a bonus.(Brief Article)
March 3, 2003... Directors' pay packages will generally include some form of annual bonus with payments ranging from a maximum of 50% to 100% of salary. The Combined Code suggests that performance conditions should be relevant, stretching and designed to...

Opinion: Leader - Realistic approach to current problems needed.(Column)
March 3, 2003... One interesting aspect of the sudden upsurge of interest in pension matters is the role of trade unions in protecting employees' pension rights. In the last year or so, there have been several threats of industrial action where employers...

Opinion: Communication View - The true cost of compliance with real money pension illustrations.(Column)
March 3, 2003... From 6 April all occupational and personal pension schemes must provide their members with a personalised annual pension illustration, expressed in real terms. The Department for Work and Pensions (DWP) has implemented new legislation which...

Opinion: Inside View - Myners: the real issues, two years on.(Column)
March 3, 2003... Another GBP10bn in lost advanced corporation tax; The Myners report on institutional investor decision-making; the introduction and subsequent delay of accounting standard FRS17; the Unilever vs Merrill Lynch court case and clandestine...

Special Report: Identifying the best opportunities.
March 3, 2003... Question 1: What are the prospects for fixed income as an asset class generally? Malcolm Jones, Aegon Asset Management, head of fixed income: "Prospects for fixed income are very good. As pension schemes mature they will invest more in...

People on the move: F&C hires Leclercq for client services post.(Luc Leclercq )(Brief Article)
March 3, 2003... F&C Management, a pan-European asset manager, has appointed Luc Leclercq as group head of client services. He was previously a managing director with JPMorgan Chase, where he held a number of operations and business management roles. ...

People on the move: McCreadie gives strength to Credit Suisse sales team.(John McCreadie appointed business development manager)(Brief Article)
March 3, 2003... Winterthur Life, the UK life and pensions arm of Credit Suisse, has strengthened its sales team with the appointment of John McCreadie as a business development manager. McCreadie previously worked at Scottish Equitable and Clerical...

People on the move: White adds shine to Innovest by heading pensions research.(Andy White appointed director of research)(Brief Article)
March 3, 2003... Investment research and advisory firm Innovest Strategic Value Advisors has appointed Andy White as director of research. White previously led the governance and engagement team at Pensions Investment Research Consultants (Pirc), the...

People on the move: Porter gives lift to JPMorgan equities.(Martin Porter appointed global head of equities )(Brief Article)
March 3, 2003... Martin Porter has been appointed as global head of equities at JPMorgan Fleming Asset Management. Porter was previously chief investment officer of the Fleming equity and balanced process globally. In his new role, Porter will have...

News Just In... : Pensions nightmare just five years away.
March 3, 2003... The "pensions nightmare" will become a living reality for many over the next five years, predicts Frank Field MP. Field said last week that the government has given no inclination of "how fast and with what devastating consequences...

News Just In... : Opra pleased as pensions fraudsters jailed.(Occupational Pensions Regulatory Authority)(Brief Article)
March 3, 2003... The Inland Revenue warned that it will pursue any other person who knowingly took part in the pensions liberation scam which saw two men jailed for a total of five and a half years last week. The stiff sentences pleased the Occupational...

Supplement: Update - Employee benefits - SMEs say advice needed to increase pensions take-up.
March 3, 2003... Pension contributions are inadequate even though more employers than ever are offering schemes, research by Momentum Financial Services has shown. Momentum's survey of employee benefits in the small to medium size enterprise (SME) sector...

Supplement: Update - Employee benefits - Blow to sports professionals' retirement plans.
March 3, 2003... Law firm Charles Russell is consulting major football, rugby, cricket and other sports clubs - as well as their players and representatives - as it alerts them to legal changes proposed recently which threaten sports professionals. Under...

Supplement: Update - Employee benefits - It's the way you sell 'em.
March 3, 2003... It is often said that the most important component of any successful enterprise is the people that work within it. Most responsible employers recognise that a good relationship with employees at all levels is crucial to the development of their...

News: Major funds look at performance fees.(Brief Article)
March 10, 2003... The GBP2.8bn Imperial Tobacco scheme and the GBP5bn BBC fund are considering a move to performance-related fees from their fund managers for the first time. They join a growing number of pension schemes said to be looking at fees linked to...

News: Fine fears should not stop benefit communication.(Brief Article)
March 10, 2003... Companies should be able to communicate the benefits of pension schemes without fear of being sued by members, a leading pensions group told the government last week. Company pension schemes can still be used as a tool for recruitment and...

News: Second hearing for annuity rule bill.(Brief Article)
March 10, 2003... A private member's bill calling for the compulsory annuity purchase rule to be scrapped won its second reading on Friday in the House of Commons, with 127 votes in favour to 26 against. Edward Garnier MP told PW: "I'm delighted that the...

News: One scheme in five favours compulsion on Myners.
March 10, 2003... Almost 20% of pension schemes would welcome legislation that forces them to comply with the investment principles laid down by Paul Myners. Watson Wyatt found that nearly a fifth of pension schemes said they would like to see government...

News: Judge overrules pensions ombudsman.(Brief Article)
March 10, 2003... The High Court overturned a pensions ombudsman ruling that said a council was guilty of maladministration after it stopped enhanced pension payments to a former employee. Maud Watts, the former employee of the London Borough of Barking &...

News: USS enterprise.(Brief Article)
March 10, 2003... The Universities Superannuation Scheme (USS) has teamed up with the Ontario Teachers Pensions Plan to launch a global investment competition among fund managers. The worldwide investment competition aims to stimulate new, creative long-...

News: Merrills calls for cautious approach.(Brief Article)
March 10, 2003... Merrill Lynch, the investment bank, has called for a more cautious approach to valuing company pension liabilities. They should be valued conservatively, treated as debt and updated regularly, the bank said. The call comes after...

News: Government shock tactic labelled failure as benefit statements attract just 426 schemes.(Brief Article)
March 10, 2003... The government's plan to shock people into saving by issuing combined pensions forecasts to millions of British workers has only managed to attract about 400 employers after three years. The figure, which critics see as too low, increases...

News: Tight-lipped tobacco pension reviews portfolio.(Brief Article)
March 10, 2003... The GBP2.34bn Imperial Tobacco pension scheme is reviewing its investment portfolio as part of a fund manager review. The scheme remained tight-lipped about the finer details of the review, but said it was only reviewing part of the scheme...

News: Bucks adds variety with 5% property increase.(Brief Article)
March 10, 2003... The GBP711m Buckinghamshire County Council pension fund is to increase its property exposure as part of an investment review of the entire fund. The fund currently invests 1.5% in property, but this is expected to increase to 5%. ...

News: Winterthur's new business soars in 51% increase.(Brief Article)
March 10, 2003... Winterthur Life, the UK life and pensions arm of Credit Suisse, saw its IFA new business grow by 51% for 2002, compared to the industry average of 5%. The latest ABI figures show that Winterthur's growth in IFA single premium new business...

News: NAPF claims victory in battle to save lump sum.(Brief Article)
March 10, 2003... The National Association of Pension Funds (NAPF) has claimed a victory at the European Parliament, saying its efforts helped fight off the threat to lump sum payments paid to occupational scheme members. A compromise package of amendments...

News: DWP holds first online discussion.(Brief Article)
March 10, 2003... The government is to hold the first ever online discussion forum as part of the ongoing consultation on the pensions green paper. The Department for Work and Pensions (DWP) will chair an online forum in an attempt to gain the widest...

News: Merrills responds to Myners.
March 10, 2003... Almost all Merrill Lynch Investment Management (MLIM) equity trades will attract a commission of varying costs, the fund manager stated in its response to the Paul Myners level one review. However, the manager said that as a result of its...

News: Allied Dunbar taken to task online.
March 10, 2003... A disgruntled investor has taken to the internet to air his grievances about the charges on his Allied Dunbar pension plan. On finding that his pension fund had halved in value, he complained to the company, but Allied Dunbar (now part of...

News: Rolls-Royce announces oe1.1bn deficit.(Brief Article)
March 10, 2003... Rolls Royce said weak stock markets were to blame for a GBP1.1bn shortfall in its UK pension fund. The company confirmed the deficit at the same time as it announced underlying profits for 2002 had fallen to GBP255m from GBP475m the...

News: Penrose inquiry boost.(Brief Article)
March 10, 2003... Lord Higgins, the shadow minister for work and pensions, said the government should give an assurance that the terms of reference of the Penrose inquiry into Equitable Life will not prevent Lord Penrose recommending compensation for policy...

News: SWIP sea change to specialist management.
March 10, 2003... Scottish Widows Investment Partnership (SWIP), one of the largest balanced pooled managers in the UK, is increasing its presence in the specialist investment market after the stampede by schemes away from balanced funds. Balanced mandates...

News: Poll shows support for compulsion.(Brief Article)
March 10, 2003... Nearly three-quarters of workers in Britain would be happy with compulsory pension schemes, according to an opinion poll. The poll also indicates that public support for employers being compelled to make contributions to such schemes is...

News: McCain gives Attica food for thought.(Brief Article)
March 10, 2003... The McCain Foods Pension and Life Assurance scheme has dropped fund managers Rothschild Asset Management and Singer & Friedlander Investment Management for its multi-asset portfolio. The fund has appointed Attica Asset Management to manage...

News: Strathclyde re-appoints Northern Trust.(Brief Article)
March 10, 2003... The GBP4.5bn Strathclyde pension fund has re-appointed Northern Trust as its global custodian. Northern Trust will continue to provide global custody, securities lending and cash management services. The new appointment also includes...

News: Benchmark - Bad times, good chances.
March 10, 2003... The prospect of war continues to damage confidence in the UK, and across the globe, but despite this and other setbacks I suspect we will look back on this period as a buying opportunity. We at SGAM believe now is a good time to buy UK equities...

News: Get the beers in, Cazalet tells the low earners.(Brief Article)
March 10, 2003... The government has failed low and average earners with its pensions policies and many of them would be better off with a bank account than a pension, concluded a debate of industry experts. The debate, The path to easier pensions, held by...

News: Gurkas lose low pension claims.(Brief Article)
March 10, 2003... Gurka soldiers have lost their case against the UK government over claims that their pension was inferior compared to British soldiers. The Nepalese soldiers launched a case against the Ministry of Defence (MoD) on grounds of...

News: Court decision on pensionable overtime could hit local authorities.(Brief Article)
March 10, 2003... The London Borough of Newham is facing a number of claims from members over contractual overtime to be included in pensionable pay. The potential claims follow a recent Court of Appeal ruling - London Borough of Newham v Skingle - where the...

News: Ombudsman Watch.
March 10, 2003... "Miserly Actuaries" Last week I wrote about how the Financial Times had called actuaries "crazy". Now The Times is after them. It said, on 5 March, that "until 10 years ago, generations of job changers and redundant workers were deprived...

News: Schemes fail communication test, says JLT.
March 10, 2003... Scheme communication to members remains poor despite the drift to defined contribution (DC), a survey claimed last week. Consultant Jardine Lloyd Thompson's sixth annual pension survey showed that in spite of the greater need to educate...

News: FSA to provide impartial advice.(Brief Article)
March 10, 2003... The Financial Services Authority (FSA) has teamed up with industry and consumer groups to search for a way of providing easier access to financial advice. The regulator aims to provide consumers, who do not necessarily want to buy any...

News: Zurich expands in Cardiff.(Brief Article)
March 10, 2003... Financial services firm Zurich is expanding its operations by creating a new contact centre in Cardiff. Zurich is investing GBP1.7m in the centre - the funding for which has been supported by a regional grant from the Welsh Assembly and the...

News: Pre-Retirement Association launches financial education strategy.(Brief Article)
March 10, 2003... A financial education strategy for people on the cusp of retirement was launched last week. The Pre-Retirement Association, a registered charity established in 1964, said that the strategy was formulated as a result of research conducted...

News: Private equity reverses Schroders' fortunes.
March 10, 2003... Private equity business helped Schroder Investment Management make a pre-tax profit of GBP18.9m last year, reversing its fortunes from 2001 when the manager went into the red by GBP8.1m. Schroders said 2002 was the most difficult year in...

News: Sainsbury's doubles bond allocation.(Brief Article)
March 10, 2003... The J Sainsbury final salary pension scheme has doubled its allocation to bonds in a bid to stabilise the fund and reduce investment risk. The scheme now has approximately 60% allocated to equities and 40% to bonds (or GBP760m-800m), based...

News: Isis blames loss on RSAI.(Brief Article)
March 10, 2003... An outflow of GBP1bn from Isis Asset Management in 2001 led to major losses for the firm. Last week it reported a pre-tax loss of GBP12.6m for 2002, down from a pre-tax profit of GBP17.6m in 2001. This was attributed largely to its...