Pensions Week articles from May 2003

Pensions Week archives from May 2003

News: Pensions minister post stays vacant.
May 5, 2003... Senior Labour party figures are considering leaving the post of pensions minister empty in the wake of Ian McCartney's move to the role of Labour party chairman, sources close to Whitehall say. Certain ministers are understood to have said...

News: Committee slams Opra and DWP for small case focus.(Occupational Pensions Regulatory Authority and Department for Work and Pensions)(Brief Article)
May 5, 2003... A cross-party committee of MPs slammed the Occupational Pensions Regulatory Authority (Opra) and the Department for Work and Pensions (DWP) last Friday for their failure in addressing major risks to pension scheme members. A House of...

News: Co-op prepares to go out to tender.(Brief Article)
May 5, 2003... The Co-operative Group's GBP2bn CWS Pension Scheme is preparing to tender for investment mandates. Further details will be released in around two to three weeks, said a spokesman. In May 2002 the fund severed its 30-year link with...

News: Taxman axes Sipp audit.(Inland Revenue to drop pensions service)
May 5, 2003... The Inland Revenue is to scrap its proposed audit of self-invested personal pensions (Sipps), which was prompted by illegal investments by customers and by providers that failed to whistleblow. The Revenue announced the Sipp audit last June...

News: Government to add up stakeholder sales.(Brief Article)
May 5, 2003... The government is to carry out its own count of how many stakeholder policies have been sold to the target group of lower paid workers - while observers on the sidelines quip that the number can be totted-up on one hand. The Inland Revenue...

News: Revenue to bear more pain as overpaid Serps rebates mount.(Inland Revenue)
May 5, 2003... More cases of overpaid Serps rebates by the Inland Revenue could emerge in the coming months for schemes with year-ends later than April 2003, as a result of a glitch in the notorious NIRS 2 computer system. Certain private and...

News: BIAM selects FPS for admin.(Bank of Ireland Asset Management names FPS Group to handle portfolio)(Brief Article)
May 5, 2003... Bank of Ireland Asset Management (BIAM) has appointed FPS Group to administer an additional voluntary contributions (AVC) portfolio. FPS will take on responsibility for record-keeping of some 5,000 members of 40 schemes denominated in euros...

News: London university picks Edis software.(Edis Partnerships providing services to University of London)(Brief Article)
May 5, 2003... Edis Partnerships, the software and administration company, has replaced Comino in providing pension services to the Superannuation Arrangements of the University of London (SAUL) scheme. Edis will provide SAUL with document management...

News: Omnetica appoints Mercer.(Mercer Human Resource Consulting)(Brief Article)
May 5, 2003... Mercer Human Resource Consulting (MHRC) has been appointed to provide pension services to the Omnetica pension scheme. MHRC will provide actuarial, investment, legal and benefit consulting services to the new defined contribution plan. ...

News: Invest globally, Credit Agricole urges.(UK pensions industry management and finance)(Brief Article)
May 5, 2003... UK pension funds must be prepared to invest on a global basis and in a range of asset classes if they are to generate real returns (alpha) in today's markets, according to Credit Agricole Asset Management (CA-AM). CA-AM chief investment...

News: Local authorities' contribution limit.(UK pension funds)(Brief Article)
May 5, 2003... Over three-quarters of local authorities cannot afford to increase employer contributions to their pension funds by more than 2%, according to a survey of some 90 local authorities. Local authorities, whose pension funds are already...

News: Bigger award for pension than pay.(Brentwood Bros. ordered to pay former employee large pension)(Brief Article)
May 5, 2003... The Court of Appeal has directed an employer to pay an employee 10 years' worth of pension and two and a half years' of pay for unfair dismissal. This is the first time the courts have awarded a pension for a time period greater than the...

News: Call to promote a savings culture.(Gordon Pollock of Association of Consulting Actuaries, political activity)(Brief Article)
May 5, 2003... Association of Consulting Actuaries (ACA) chairman Gordon Pollock has called on the government to take a fresh look at encouraging employers and employees to save for retirement. Speaking at the ACA's annual dinner, Pollock said:...

News: UK funds using equity collars.(management of UK pension funds)
May 5, 2003... UK pension funds are starting to use derivative-based "equity collar" strategies as a means of participating in any equity market rally, while limiting losses from further market falls. Schroder Investment Management said its own final...

News: Axa staff threaten strike over pension scheme changes.(Brief Article)
May 5, 2003... Insurance firm Axa has told its staff they will have to contribute 5% of their salaries to the non-contributory pension scheme. Axa is also increasing the normal scheme retirement dates from age 60 to age 65. Around 2,000 personnel are...

News: GMO secures mandates in UK worth oe160m.(Brief Article)
May 5, 2003... GMO, a fund manager, has won six UK equity mandates for pension schemes including ChevronTexaco. The funds total in excess of GBP160m. Management consultancy firm Accenture is also a client win, along with an unnamed local authority, GMO...

News: Rumours circulate over Morley's future.(Morley Fund Management)(Brief Article)
May 5, 2003... Speculation about Morley Fund Management's future as part of Aviva resurfaced after Aviva Life Insurance Company (ALIC), Aviva's US division, awarded Standish Mellon Asset Management, rather than Morley, a $2bn fixed-income mandate. But an...

News: Insider - Restrict golden goodbyes or face regulator's heavy hand.(U.S. pensions industry, management)
May 5, 2003... Do you remember the old Bob Dylan song that went: "Something is happening but you don't know what it is, do you Mr Jones?" I feel a little bit like Mr Jones when it comes to corporate governance. Pension funds and institutional investors in...

News: Opas stakeholder hotline cools down.(Occupational Pensions Advisory Service)(Brief Article)
May 5, 2003... The dedicated stakeholder helpline run by the Occupational Pensions Advisory Service (Opas) has seen a huge drop in calls. Complaints and queries to the line fell by 20,000 - from 27,770 to 7,380 - yet calls about broader pensions issues...

News: Steel workers' fury at NAPF.(National Association of Pension Funds, political activity)
May 5, 2003... Steel workers were angry after the National Association of Pension Funds (NAPF) recommended that investors vote in favour of Corus's executive rewards package at the steel company's annual general meeting (AGM) last Tuesday (29 April). The...

News: Ombudsman Watch.(pension plan taxation)
May 5, 2003... Nigella [Lawson] The ultimate delight - when it comes to pension planning - is to get a corporation tax deduction (and no benefit-in-kind charge on the employee) for the employer's pension scheme contribution; followed by a tax-free...

News: Call for funds that are pan-European.(management of funds in the UK)(Brief Article)
May 5, 2003... Only 25% of Europeans are covered by an occupational or personal pension scheme, according to the World Pension Association annual conference held recently in Dublin. Finnish MEP, Piia-Noora Kauppi, told the conference that this underlined...

News: State pension 'to be topped up'.
May 5, 2003... The Government Actuary's Department (GAD) has accepted that basic state pension increases may have to rise above price inflation from time to time in order for UK pensions to remain credible. The Conservative pensions spokesman David...

News: MOW: solvency worries overblown.(pensions industry management)
May 5, 2003... Differing ways of measuring life office solvency based on assets held revealed either a loss of 2% or gain of 2% in 2002. Despite this discrepancy, concerns about stability in the sector are exaggerated, says a consultant. Risk management...

News: Actuaries urge FSA to be open.(UK Financial Services Authority)(Brief Article)
May 5, 2003... Actuaries have urged the Financial Services Authority (FSA) to continue to require life offices to publish openly the valuation of policyholder liabilities in with-profit funds. The FSA has proposed that the valuations in future should be...

Spotlight: Avoiding getting cheated by death.(UK pensions industry management)
May 5, 2003... Employers replacing defined benefit (DB) with defined contribution (DC) pension schemes face some tricky decisions on death-in-service and ill- health/early retirement benefits. Under DB schemes these have always been taken for granted. But the...

Governance Watch: Flagging up share incentive schemes.(UK pensions regulation)(Brief Article)
May 5, 2003... When a company proposes new share incentive schemes Manifest generally finds issues of concern that shareholders should consider or raise with the company. The Laird Group, a FTSE-250 company whose AGM is on 9 May, is proposing an Inland...

Opinion: Leader - Taking an interest in excessive remuneration.(National Association of Pension Funds and Association of British Insurers' political activity)
May 5, 2003... The current annual general meeting season has been characterised by rows over executive pay. Institutional investors, led by the Association of British Insurers (ABI) and the National Association of Pension Funds (NAPF), are becoming more vocal...

Opinion: Personal View - Opra's transfer value lock-in could lead to scheme exit penalties.
May 5, 2003... Trying to solve the pensions crisis is beginning to resemble the alchemy of the 21st century, a craft practiced by highly educated members of esoteric professions in the search for an elixir promising eternal security. Behind closed doors they...

Opinion: Inside View - The importance of proving best execution.
May 5, 2003... At the National Association of Pension Funds conference in March, Ruth Kelly, financial secretary to the Treasury, emphasised that "the challenges raised by Myners on transaction costs remain". She reiterated that the government was "serious...

People on the move: Fellow Hepher to chair LCP board.(Brief Article)
May 5, 2003... Consulting actuary Lane Clark & Peacock LLP (LCP) has appointed Institute of Actuaries fellow Michael Hepher as its independent director and chairman. Hepher was formerly group managing director of BT and has been a fellow of the Institute...

People on the move: Wyatt hires Crowther.(Brief Article)
May 5, 2003... Watson Wyatt has appointed Jonathan Crowther as a senior investment consultant. Crowther, who has spent many years working for General Accident, will start at Watson Wyatt in May. He joins one of the firm's Leeds-based pension fund...

People on the move: Crockett to service Mellon's clients.(Brief Article)
May 5, 2003... Mellon European Fund Services has appointed Paul Crockett to lead the client implementation team for its investment manager solutions offering. Based in London, Crockett will work closely with Mellon's product development, business...

People on the move: Gartmore gives Melluish extra responsibility.(Brief Article)
May 5, 2003... Gartmore has appointed Simon Melluish as head of the US equity desk for Gartmore Global Investments. This is a newly created position that sits parallel to the role currently held by Melluish, head of US equity desk for Gartmore Investment...

Supplement: Update - Financial health check-up - UK employers smitten by flexible reward schemes.
May 5, 2003... Rapid growth in the number of firms offering flexible reward schemes (flex) is anticipated over the next two years, according to research by Deloitte & Touche. The research found that less than one-fifth (17%) of UK firms surveyed offered...

Supplement: Update - Financial health check-up - Cash in hand most popular bonus.(Brief Article)
May 5, 2003... Offering employees an individual cash payment is the most widely used type of bonus and variable pay scheme. Just under two-thirds (64%) of employers offer cash bonuses to senior managers, while 58% of middle and first-line managers are...

Supplement: Update - Financial health check-up - Merrill blows stockpicking trumpet.(Brief Article)
May 5, 2003... Merrill Lynch Investment Managers' (MLIM) US equity team believes that a stockpicking approach is the best way to invest in the US market given low growth and the difficulty of predicting what sectors, styles or the overall market will do. ...

Supplement: Update - Financial health check-up- Financial check-up.
May 5, 2003... According to the CIPD Labour Turnover survey for 2002, it takes 14 weeks to recruit a member of staff and costs the company on average GBP6,000. Clearly, the retention of quality staff is an important factor in any company. If an employee...

News: Criminal investigation after scheme collapse.
May 19, 2003... An unprecedented investigation is to take place into the latest high-profile pension scheme collapse that has left members penniless. The independent trustee of the failed engineering firm Blyth & Blyth has commissioned an actuarial report...

News: Long-term mandate competition shunned by fund managers.(Brief Article)
May 19, 2003... The call for longer-term investment management contracts for fund managers is receiving a mixed reaction, with some of the biggest asset managers seemingly unwilling to even have a stab at a competition to design a prototype mandate. The...

News: Vicious combo may hit UK schemes.(Brief Article)
May 19, 2003... A combination of the increasingly popular bond-led funding benchmarks in the UK, along with the EU pension funds directive announced recently, could destabilise many British schemes by leading trustees to think they must fund their schemes on a...

News: Stern orders for defence ministry.
May 19, 2003... The pensions ombudsman has ordered the Ministry of Defence (MoD) to pay all legal costs on behalf of a member of the RAF pension scheme after it incorrectly paid him just 60% of his full entitlement. The case saw the ombudsman, David...

News: Mercer replaces Watson at Emap.(Brief Article)
May 19, 2003... Mercer Human Resource Consulting (MHRC) has replaced Watson Wyatt to provide pensions services to the Emap pension scheme. MHRC will provide actuarial and investment consulting services. Emap has a defined contribution scheme with more...

News: Merseyside sticking with BoNY despite low lending returns.
May 19, 2003... Merseyside pension fund is to retain custodian Bank of New York (BoNY) despite a securities lending programme that generated less than 25% of the expected income. The GBP2.5bn Merseyside council pension fund entered a securities lending...

News: NAPF gears up for lively debates at conference.(Brief Article)
May 19, 2003... Lively debates are set to take place at the National Association of Pension Funds' (NAPF) annual conference in Glasgow this week. The discussions this year will include a closer look at alternatives to final salary schemes, the problem of...

News: Opra accused of chasing empty stakeholder boxes.(Brief Article)
May 19, 2003... The pensions regulator has been accused of wasting time and resources with its planned year-long campaign to check whether employers are complying with stakeholder pensions requirements. Grant Thornton's Financial Markets Group said the...

News: AXA will talk if union backs off.(Brief Article)
May 19, 2003... Insurance giant AXA has agreed to hold discussions over changes to its pension scheme on the condition the union involved, Unifi, backs away from all industrial action and keeps out of the press. A planned demonstration outside the...

News: Burton blasts charging caps for savings products.(Brief Article)
May 19, 2003... Alan Burton, outgoing chairman of the Investment Management Association, criticised proposals to apply charging caps to simple savings products, as recommended by Ron Sandler in his review of long-term savings. He echoed a popular industry...

News: Mercer calls for liability assessment.(Brief Article)
May 19, 2003... Mercer Investment Consulting has called for investment managers to be assessed against performance targets that relate more closely to fund liabilities, which appears to ally it to the narrow approach described in the investment panel debate...

News: Two styles of liability-led investing.
May 19, 2003... The trend towards liability-led investing could lead to two contrasting approaches to pension fund investment, according to the participants in the latest Pensions Week investment panel discussion (see pages 27 to 32 in this issue). In the...

News: Uni chief tells of shrinking solvency ratios.(Brief Article)
May 19, 2003... The gap between life insurance firms' assets and liabilities is diminishing fast, even though many have propped up their solvency margins with projections for unearned future profits. If the solvency ratios continue to drop, then the...

News: MLIM wins mmO2 mandate as Co-op settles.
May 19, 2003... Merrill Lynch Investment Managers (MLIM) has won a GBP70m specialist equity mandate from mobile communications provider mmO2. The mandate will be managed by Hugo Tudor of MLIM's specialist UK team. MLIM's good news comes as the Co-operative...

News: Invesco merges UK teams.(Brief Article)
May 19, 2003... Invesco UK, part of Amvescap plc, one of the world's largest investment management organisations, is combining its two existing UK investment teams. This will result in people from its UK, European and international desks relocating from the...

News: Threadneedle takes on double mandates from Carillion.(Brief Article)
May 19, 2003... Threadneedle Asset Management has won two defined contribution mandates at Carillion, the business and construction services company, which it will jointly manage with Legal & General Investment Management (LGIM). The schemes are the...

News: RAC transfers to Heywood's AXISe.(Brief Article)
May 19, 2003... The RAC pension scheme has completed its transition to AXISe, a pensions software system provided by Heywood. The transition to AXISe incorporates the final salary and flexiplan sections, after two months of parallel running. The RAC...

News: Benchmark - Seeing the back of the bear.
May 19, 2003... Predictions as to the end of the bear market currently range between zero and 30 years. SGAM's view is towards the more optimistic and my colleague Saker Nusseibeh has been comparing current trends to past market behaviour, in the 1970s and...

News: Watson Wyatt moves to prove added value.
May 19, 2003... Fund managers selected by Watson Wyatt outperformed across all major asset classes before fees over the past three years. The firm last week published the first of its annual 'model portfolio' results as part of a move towards more...

News: FSA paper may cloud consumer perceptions.(Brief Article)
May 19, 2003... Royal London, the mutual life insurance company, has welcomed the improvements recommended in the Financial Service Authority's (FSA) consultation paper on reforming polarisation, but still has reservations over how clearly consumers will...

News: Actuaries split over LBP plans.(liability benchmark portfolio)
May 19, 2003... Dissent has broken out between actuaries after an apparent attempt by promoters of a new bond-led solvency measure to gloss over opposition to their proposal. Called the 'liability benchmark portfolio' (LBP), the proposal is a solvency...

News: Ombudsman Watch.
May 19, 2003... Di-hydrogen Monoxide Last week The Guardian reported that 86% of those surveyed in Idaho believed the chemical di-hydrogen monoxide should be banned. After all di-hydrogen monoxide is a major component in acid rain; accidental inhalation...

News: The young shun state pension help.(Brief Article)
May 19, 2003... Young people no longer expect to rely on the government for income when they retire, according to a survey. Only 3% of 18 to 25-year olds surveyed said pensions made them think of something paid for by the government. Thirty-three per...

News: NAPF lends hand to small firms.(National Association of Pension Funds)
May 19, 2003... An initiative to help smaller employers offer their staff workplace pensions has been launched by the National Association of Pension Funds (NAPF). A new working group will investigate ways to encourage multi-employer, or industrywide,...

News: Wesleyan takes teachers back to school over financial issues.(Brief Article)
May 19, 2003... Wesleyan Assurance Society has won the contract to provide independent financial advice to over 211,000 teachers across the UK, in partnership with the National Association of Schoolmasters Union of Women Teachers (NASUWT). The agreement...

News: Aquila's software solution embraced by UK arm of TDG.(Brief Article)
May 19, 2003... The British arm of European logistics groups TDG has gone live with software company Aquila's ASP solution to administer its pensions. The ASP solution offers the functionality to administer both TDG's defined benefit and defined...

News: Too far, too fast for equities.
May 19, 2003... Cash levels in fund manager portfolios have increased slightly across the globe, reflecting the view that investors believe equity markets have rallied too far and too fast in the short term. Yet UK cash holdings have fallen slightly, where...

News: Investec ditches defensive stocks for cyclical shares.(Brief Article)
May 19, 2003... Investec Asset Management's UK equity team has reduced its holdings in defensive stocks in order to buy more cyclical shares. Investec said the stocks are showing improved earnings revisions and better technical share trends. Michael...

News: AIFA attacks Sandler's stakeholder suite.(Association of Independent Financial Advisers)
May 19, 2003... Consumers will need to be protected when buying the proposed Sandler products, even though the savings vehicles are supposedly foolproof, according to the Association of Independent Financial Advisers (AIFA) Although the stakeholder...

News: "Grease" is a slippery slope, says ISIS.
May 19, 2003... ISIS Asset Management is supporting a new guide aimed at eliminating the routine practice of companies offering small bribes, known as "grease" payments, to overseas government officials. Such payments are treated differently in various...

News: ISS boosts corporate ratings coverage with non-US firms.(Brief Article)
May 19, 2003... Institutional Shareholder Services (ISS), a provider of proxy voting and corporate governance data services added 2,800 non-US companies to its ratings coverage of 5,400 US businesses already rated. ISS operates Corporate Governance...

News: Call for tighter regulation of cross-border voting rights.(Brief Article)
May 19, 2003... The ability of international investors to access disclosure documents and exercise their voting rights at shareholder meetings is fragmented and inefficient, according to a report by the International Corporate Governance Network (ICGN). ...

News: Tailor-made risk management.(Brief Article)
May 19, 2003... The Occupational Pensions Defence Union (OPDU), which provides risk management and insurance for trustees, has launched a venture to develop and implement a programme of risk management that is specific to each pension fund. Trustee Risk...

News: It's been emotional, says SLI.(Standard Life Investments Ltd.)
May 19, 2003... Standard Life Investments (SLI) is attempting to measure market movements by reading investors' emotions, because this is the best gauge of market behaviour over the short term, the investment house believes. The measurement of investor...

News: Exclusive European equity focus sees AFS play to its strengths.(Brief Article)
May 19, 2003... Ansbacher Fund Services (AFS) has launched a fund administration service focusing exclusively on the European private equity and fund of funds industry. It is one of the first such administrators based in the UK to concentrate on this sector....

News: Dealing is child's pay for Mako.(Brief Article)
May 19, 2003... The Mako Group, a market making and proprietary trading company, is co- ordinating a charity event known as Dealing for Donation Day, with Children in Crisis as the headline charity. On 18 September 2003, City institutions, banks, brokers,...

News: Asian outlook is favourable, says Aberdeen manager.(Brief Article)
May 19, 2003... The risk of the SARS virus may be decreasing medically, but Devan Kaloo, senior Far East fund manager at Aberdeen Asset Management, suggests that there is still room for recovery in the Asian economy. He says that there will be a short-term...

Spotlight: Should consultants be blamed for scheme deficits?
May 19, 2003... What, if any, responsibility should investment consultants take for the current funding deficits faced by so many of our defined benefit pension schemes? In the late 1990s they were advocates of the 70/30 equity bond split. "And everyone...

Governance Watch: Too long in the tooth.(Brief Article)
May 19, 2003... There are some companies whose board composition and service contracts should lead shareholders to ask searching questions, particularly if they are within the top 350 companies in the UK. Headlam Group, which is holding its AGM this week, is a...

Opinion: Leader - Brown's failure to act is hurting pensions.
May 19, 2003... At the time of writing, the government still has to appoint a new pensions minister, well over a month after Ian McCartney moved onto become Labour party chairman. Perhaps the prime minister is more concerned with other issues, or possibly, he...

Opinion: Personal View - Helping the people to help themselves.
May 19, 2003... There is a general high level of awareness that the UK population as a whole are not saving enough to meet their expected standard of living in retirement and other financial goals. One of the main reasons is a general lack of understanding of...

Opinion: Inside View - Impacting on investment management agreements.
May 19, 2003... The Myners principles have had an effect industrywide, but what have they meant for investment management agreements? The Myners principles require trustees to have written agreements with their investment managers covering: - the...

Special Report: Fears, fallacies and the future of hedge funds.
May 19, 2003... Traditionally considered a stodgy, backroom business, pensions news is now firmly planted on the front page. The reason is that equities, that great tide lifting all boats in the last decade, so eagerly embraced by the funds and their...

Investment Panel: Liability-led investment - Intro.
May 19, 2003... It may seem hard to credit, but in many ways pension fund investment is an area as prone to the diktats of style gurus as haute couture or street fashion. However, one key difference is that the pronouncements on investment are based on...

Investment Panel: Liability-led investment - Investment Panel profiles.(brief biographical information on Geoff Cheetham, Andrew Dyson, and Craig Gillespie)(Brief Article)(Biography)
May 19, 2003... Geoff Cheetham, head of institutional business development at HSBC Asset Management Geoff Cheetham is director, head of DC and institutional business development for HSBC Asset Management's UK operation. He joined HSBC in January 2003,...

Investment Panel: Liability-led investment - What is liability-led investing, and what effect can it have on a pension fund's performance?(Interview)
May 19, 2003... When deciding to pick a topic for this quarter's investment panel, it was decided to look at an issue currently attracting much interest from pension funds - liability-led investing. The panel looked at what people understand by the term, how...