Pensions Week articles from May 2008

Pensions Week archives from May 2008

EMI trustees' deal to set a precedent.
May 5, 2008... Byline: Tom Willetts The scheme-specific funding regime could end if the Pensions Regulator imposes a funding solution on the EMI pension scheme, according to a lawyer. Clive Pugh, partner at Burges Salmon, said the regulator could set...

Battle to win buyouts has slashed costs.
May 5, 2008... Byline: Ruth Emery The cost of buyout has become so competitive that there are suggestions pension schemes could secure a price that is actually lower than the cost of their liabilities. Logan Anderson, head of customer relations at...

A parable of two pensions.
May 5, 2008... Byline: David Rowley - Editor, Pensions Week A comment to make your blood run cold, came to me last week from a member of a pension department who was answering our forthcoming DC survey. When quizzed about employee engagement, the person...

Lawyers concerned over trustee powers.
May 5, 2008... Byline: David Rowley Employers have welcomed the government's clarification on the Pensions Regulators's new powers, but lawyers warn that they give trustees too much power. While the Confederation of British Industry (CBI) has...

PPF pledges levy will be fair, simple and proportional.
May 5, 2008... Byline: David Rowley The Pension Protection Fund (PPF) has committed to core operating principles of fairness, proportionality and simplicity over the next three years. The statement was made in the fund's new management plan, which...

Consultancy inundated over 10p tax debacle.
May 5, 2008... Byline: David Ricketts Low earning pensioners hit by the abolition of the 10p tax band have flooded a leading consultancy with complaints over the tax hit. Alan Smith, director at First Actuarial, said his consultancy received around...

DC becomes predominant form of pension.
May 5, 2008... Byline: Kalpana Fitzpatrick The majority of UK employers now operate a defined contribution (DC) pension scheme, according to Capita Hartshead. In its annual pension scheme administration survey, the firm found that DC plans are now...

News in brief.
May 5, 2008... The Aon200 Index, which tracks the surplus or deficit of the 200 largest UK privately-sponsored final salary pension schemes, found that 56% were in surplus at the end of April. "The aggregate surplus has remained relatively stable during...

Women confused over contribution rights.
May 5, 2008... Byline: Tom Willetts Almost two million women are losing out on potential pension income due to confusion over their eligibility, according to a study. Research from HSBC found more than a third of women incorrectly believed they had...

Bargains at the banks with private equity sell-off.
May 5, 2008... Byline: David Rowley Distressed selling of private equity debt by banks presents one of the best bargains currently on the market, according to Henderson Global Investors. Banks keen to transfer risk for hard cash over liquidity fears...

L&G wins GBP270m pensions insurance deal.
May 5, 2008... Byline: Tom Willetts The BBA Aviation pension scheme has agreed to insure its pensions in payment with Legal & General. Under the terms of the deal, the scheme is transferring more than GBP270m of assets to Legal & General, and in...

Firms fail to realise benefits of A-day.
May 5, 2008... Byline: David Ricketts Some employers are still failing to take advantage of changes introduced on A-day, according to Aegon Scottish Equitable. Two years on from the introduction of the pension simplification rules in April 2006,...

PADA 'insensitive' to current schemes.
May 5, 2008... Byline: Tom Willetts The charging structure priorities identified by the Personal Accounts Delivery Authority (PADA) risks undermining existing employer schemes, according to an expert. Responding to PADA's consultation on its charging...

News in brief.
May 5, 2008... The Pensions Advisory Service has launched a web-based annuity planner. The self-help tool was designed to help people make choices when they retire and want to turn savings into an annuity. It was developed by a group which included...

FDs underestimate key longevity risks.
May 5, 2008... Byline: David Ricketts Finance directors are leaving their company pension schemes exposed to increasing longevity risks, the Chartered Instituted of Management Accountants (CIMA) has warned. In its latest report, Apocalytpic...

Balanced funds reduce allocations to equity classes.
May 5, 2008... Byline: Kalpana Fitzpatrick Balanced pooled funds have seen a significant drop in allocations to UK equities, according to the latest Caps figures from BNY Mellon Asset Servicing. The figures showed that weightings in UK equities fell...

Parity plans for PPF compensation.
May 5, 2008... Byline: Tom Willetts Men and women will receive equal compensation under a plan unveiled by the Pension Protection Fund (PPF). Under the proposal, comparable male and female members of schemes being assessed for entry into the PPF - or...

Members unaware of pensions' value.
May 5, 2008... Byline: David Ricketts Almost two-thirds of trustees sitting on defined contribution (DC) pension schemes think scheme members are in the dark over how much their pension is worth. Aon Consulting asked over 120 trustees of DC schemes...

Spending on care in retirement is set for big rise.
May 5, 2008... Byline: David Ricketts Government spending on pensions and care for older people will rise to around 8% of GDP by 2050, research from the Pensions Policy Institute (PPI) has found. In its latest briefing note, the research body found...

Charities vulnerable to pension changes.
May 5, 2008... Byline: Tom Willetts Charities must take more steps to address pension scheme risk, according to research from Barclays. A study produced by the financial services group found that, even though many charities had closed their defined...

Front runners.
May 5, 2008... Byline: David Rowley Pension funds invest for the long term and do not make rapid switches out of asset classes. However, the increased interest in tactical asset allocation is making the current market opportunities of interest. ...

Trustees should boycott high fees.
May 5, 2008... Byline: Clive Gilchrist At a conference recently, I heard the head of a leading investment consultancy criticise trustees for overpaying investment managers. He said we should pay the managers less and invest the savings on asset...

Personal view - Permitted links will take the DC landscape into a brave new world.
May 5, 2008... Byline: Henry Tapper How will the Financial Services Authority's (FSA) more permissive 'permitted links' guidelines - governing what can and can't be held within an insured defined contribution (DC) fund - impact on the DC landscape in the...

Technical view - Achieving the pan-European goal.
May 5, 2008... Byline: Helen Dowsey The viability of pan-European pensions is a hot topic of discussion, yet the meaning of pan-European is open to interpretation. Does it mean any cross- border pension provision, or one plan across all member states?...

Governance - A governance strategist well worth reviewing.
May 5, 2008... Last week, the corporate governance community and the business world of which it is part, lost a significant figure with the death of Sir Derek Higgs. Higgs was, of course, responsible for one of the most significant contributions to the UK's...

Notice board - NAPF events and training.
May 5, 2008... May 15, 2008 Hot topic seminar - Regulation rendezvous, NAPF, Westminster Book your rendezvous on the main regulatory developments so far this year, as well as an insight into some important new directions key players in the industry...

View from the bridge.
May 5, 2008... Byline: Norman Russell Interference Last week, our editor referred to "a particular organisation based on the south coast". I do not think he was referring to the Brighton & Hove Pensioners' Forum (an excellent "umbrella organisation...

Beginner - Enhanced transfer value (ETV) exercise - Beginners' level.
May 5, 2008... A transfer value is payable to all deferred members of an occupational defined benefit (DB) scheme at their request. It is assessed as an amount equal in value to the expected cost of providing the benefits held in respect of that member within...

Duo land key roles at Capital Cranfield.
May 5, 2008... Byline: Tom Willetts Capital Cranfield Trustees has appointed Robert Matthews and Edward Dowler as professional independent trustees to meet demand for its services. Matthews has held director level positions at Royal and Sun Alliance...

Going places.
May 5, 2008... Sackers celebrates gain of 50th solicitor Sacker & Partners has reached a milestone with the appointment of its 50th solicitor. Fuat Sami joins the firm after five years at Ashurst, where he advised on the pensions elements of public...

Top 4 moves.
May 5, 2008... 01 - Charlie Finch and David Stewart OLD - Finch and Stewart were part of Lane Clark & Peacock's buyout team NEW - They have both been promoted to partners Tel: 020 7439 2266 02 - Mark Randell OLD - Randell worked at...

Trafalgar leads the way with absolute return.
May 12, 2008... Byline: Tom Willetts A GBP1.2bn pension scheme has spurned conventional asset allocation in favour of an absolute return approach. Ros Altmann, consultant and a trustee of the Trafalgar House pension scheme, said she hoped the approach...

DC pots at risk from antiquated section 73.
May 12, 2008... Byline: Charlie Thomas Trustees must check section 73 policy wording on hybrid pensions, or risk devaluing defined contribution (DC) pots, Eversheds has warned. Two cases have recently been reported where companies' DC pots have fallen...

Here comes the sun (we hope).
May 12, 2008... Byline: David Rowley - Editor, Pensions Week Cascade is a delightful word you hear a lot of in HR circles, which refers to the process of passing on often undelightful messages from senior management to the junior ranks. In theory it's a...

EU insurance plans could sink DB in UK.
May 12, 2008... Byline: Charlie Thomas Solvency II's proposed changes to the pensions industry would sound a death knell for defined benefit (DB) schemes, according to Allianz Global Investors. Currently DB pensions can be funded by assets as well as...

King to finish all ombudsman cases within two years.
May 12, 2008... Byline: Charlie Thomas The pension ombudsman has committed to completing all current investigations within 24 months. The aim is detailed within the body's first ever annual business plan, which also reveals that it aims to respond to...

Graduates will be put off pension saving by PAs.
May 12, 2008... Byline: David Ricketts Employers switching to personal accounts in 2012 will have to work hard to retain graduates who will be running to stand still financially, Hewitt Associates has claimed. The consultant argued the increased...

Beneficiary fails to sue trustee director.
May 12, 2008... Byline: David Rowley An attempt to sue the directors of a trustee company has failed in what is being hailed as a clarification on trustee responsibility. A High Court ruling on May 8, Gregson vs HAE Trustees, found that beneficiaries...

News in brief.
May 12, 2008... The Pensions Regulator has published its first in a planned series of good practice guides on DC schemes for trustees and employers. The first set of guidance covers retirement options and the open market option in occupational DC schemes....

Telent a turn-off for uninsured buyouts.
May 12, 2008... Byline: Tom Willetts Trustees have little appetite for uninsured pension buyouts after the backlash against Pension Corporation's takeover of Telent, according to an actuary. Jeremy Dell, partner at Lane Clark & Peacock (LCP), said the...

Muse signs deal with P&O on back of project success.
May 12, 2008... Byline: David Rowley The P&O Ferries trustee board has appointed Muse Advisory as secretary of its newly-launched 750 employee defined benefit (DB) scheme. The appointment follows work carried out by the consultancy in setting up the...

Scottish fund adopts ethical practice.
May 12, 2008... Byline: David Rowley The GBP3bn Lothian pension fund has signed up to the UN principles for responsible investment. The voluntary set of principles provide a list of possible actions for incorporating ethical, social and governance...

Letter - Smoothing the way for trustee applicants.
May 12, 2008... I read with interest the story on PensionsNews.com (PW's online sister channel. See PN 07/05/08) about firms struggling to find trustees. The number of schemes finding it difficult to recruit trustees has increased by nearly a third over the...

Part-time head appointed by PPF.
May 12, 2008... Byline: David Rowley The Pension Protection Fund (PPF) has appointed an interim head of investment on a part-time basis. The fund, which is expected to grow from GBP1.5bn to GBP5bn over the next 12-18 months, is known to be looking at...

News in brief.
May 12, 2008... Trustees are starting to avoid complex buyout solutions in favour of simplicity. Nigel Burton, director of pensions at AIG Life, said there would be an increasing number of vanilla buyouts throughout 2008. "What trustees really want is...

Yield hike is pushing up annuity payouts.
May 12, 2008... Byline: David Rowley The credit crunch has helped increase the income paid out on annuities, research from the Alexander Forbes Annuity Bureau has shown. As investors have fled from corporate bonds, this has forced their yields up...

Killik & Co to turn group Sipps green for CDP.
May 12, 2008... Byline: Ruth Emery Killik & Co has led an assault on the group self-invested personal pension (Sipp) market by launching its first, and also preparing a 'green group Sipp' for the Carbon Disclosure Project. Specialist insurance firm...

Aberdeen buy makes it UK property giant.
May 12, 2008... Byline: David Rowley Aberdeen Asset Management is to become the second biggest property investment manager in the UK, following its agreement to buy Goodman Property Investors (GPI). GPI's GBP7bn of assets under management, which...

Equity shift hints at the demise of credit crunch.
May 12, 2008... Byline: David Rowley Institutional investors are returning to developed country equities in a sign that the worst of the credit crunch is over. The move back into equities is being led by opportunistic risk-seekers, according to State...

Commercial property stock should go green.
May 12, 2008... Byline: David Rowley More should be done to bring existing commercial property in line with sustainable investment, a leading property figure has claimed. Paul McNamara, head of research at PruPim, said that until recently, fund...

USS backs low carbon investment.
May 12, 2008... Byline: David Ricketts The Universities Superannuation Scheme (USS) is pumping investment into a GBP56m initiative to help finance low carbon investment opportunities. The UK's second largest pension fund, valued at GBP30bn, is one of...

Talking heads.
May 12, 2008... Byline: David Ricketts and Tom Willetts 1 - Will the Pensions Regulator's strengthened moral hazard powers have any unintended consequences? 2 - How should the regulator strengthen defined benefit schemes over the next three years? ...

Commodities - a slippery subject.
May 12, 2008... Byline: Lindsay Tomlinson One of The Economist's most famous predictions was its 1999 cover 'Drowning in oil'. The theory was that, while everyone was excited about rising prices, concern was likely to generate supply, which would keep...

Personal view - The government should be trying to rekindle the dying embers of DB.
May 12, 2008... Byline: Brian Nimmo The Association of Consulting Actuaries (ACA) has spent over a year lobbying the government to change legislation to enable greater sharing of pensions risks between members and sponsors. Its aim is to move away from...

Technical view - In hot pursuit of liability hedging.
May 12, 2008... Byline: Paul Trickett Some commentators are a little sceptical of the role of liability hedging within pension fund management. However, it can play a role for most defined benefit pensions if instituted in a way consistent with the...

Governance - Keeping it under your hat will be a thing of the past.
May 12, 2008... Just under a year ago the Institutional Shareholders Committee (ISC) - which brings together the NAPF, the Association of British Insurers, the Investment Management Association and the Association of Investment Companies - issued a short but...

Notice board - NAPF events and seminars.(Conference news)
May 12, 2008... Local authority conference The new LGPS: ringing the changes - May 19-21, 2008, The Belfry, Warwickshire For the third year, the NAPF local authority conference returns to the Belfry, with David Blunkett providing the keynote address....

View from the bridge.
May 12, 2008... Byline: Norman Russell Pension lawyers Apparently some people will do anything to get hold of a pensions lawyer. The Association of Pension Lawyers (APL) had to issue a warning to its members last month on the subject of unsolicited...

Intermediate - Enhanced transfer value (ETV) exercise - Intermediate level.
May 12, 2008... The key objective of the company in making an offer will be to achieve as high a reduction in the liabilities as possible (for an acceptable level of cost). Therefore it will be desirable to achieve as high a take-up rate of the offer as...

Blackie builds up Mercer in Scotland.
May 12, 2008... Byline: Tom Willetts Mercer has poached Steven Blackie from rival Aon Consulting to head its consulting business in Scotland. He joins as a principal and senior consultant in the firm's Edinburgh office and will work closely with...

Going places.
May 12, 2008... Kelsey to focus on hedge funds at Cardano Cardano has appointed Bill Kelsey as a fund-of-hedge funds manager to boost its UK investment management team. He has responsibility for selecting equity long/short and long-only managers for...

Top 4 moves.
May 12, 2008... 01 - Robert Matthews and Edward Dowler OLD - Matthews was a director at Royal & Sun Alliance Investments and Dowler was group general manager of Electrocomponents NEW - They become professional independent trustees at Capital Cranfield...

GPPs get the green light to auto-enrol.
May 19, 2008... Byline: David Ricketts The European Commission has given employers the go-ahead to automatically enrol workers into group personal pensions (GPPs) when personal accounts are introduced in 2012. The decision will pave the way for...

Equiniti bags ITN as first admin client.
May 19, 2008... Byline: David Rowley The ITN final salary scheme has become the first pension administration client of Equiniti, formerly known as LloydsTSB Registrars. Most of Equiniti's current clients use it for share scheme services, but after...

The delegated consultant.(Conference notes)
May 19, 2008... Byline: David Rowley - Editor, Pensions Week A round of applause for Tim Hodgson, who single-handedly explained Watson Wyatt's seismic shift of focus at a conference last week (see page 5), after his bosses' enforced absence. Roger...

First FTSE 100 firms to derisk through buyout.
May 19, 2008... Byline: Tom Willetts Two FTSE 100 companies have broken new ground by offloading risks from their defined benefit (DB) pension schemes to buyout firms. In the fourth largest buyout so far, the GBP1bn Friends Provident pension scheme...

OPDU partnership creates ultra trustee protection policy.
May 19, 2008... Byline: Charlie Thomas A global insurer has claimed it has created the most comprehensive insurance policy for trustees so far. ACE Europe has joined the Occupational Pensions Defence Union (OPDU) to create a policy that covers court...

Watson Wyatt rubber stamps fiduciary role.
May 19, 2008... Byline: David Rowley Trustees of final salary schemes face an unstoppable momentum towards fiduciary management, Watson Wyatt has claimed. In a hard-hitting document calling for a rethink on many areas of pension fund investing, the...

Master trust courts deferred DC members.
May 19, 2008... Byline: David Rowley SEI is talking to a leading employer over the prospect of taking on the deferred members of its defined contribution pension plan. Such employees would join SEI's master trust, a multi-employer arrangement that...

News in brief.
May 19, 2008... BDO Stoy Hayward has teamed up with Thomsons Online Benefits to offer individual financial advice to employees. Under the new agreement, to be offered on a transparent fee basis, BDO Stoy Hayward will offer a range of services to employees...

Administrators pair up for PADA contract.
May 19, 2008... Byline: David Ricketts Pension administrators are forming joint teams to pitch for the personal accounts administration contract, according to one of the main contenders. Although no official announcement has been made about when the...

Increase in online communications for UK pension schemes.
May 19, 2008... Byline: David Ricketts More than half of UK pension schemes have a dedicated pensions website, according to results from the latest Capita Hartshead pensions admin survey. The survey, which looks at both in-house and third-party...

Xafinity wins YMCA web access deal.
May 19, 2008... Byline: Tom Willetts The YMCA Pension and Assurance Plan has appointed Xafinity Consulting to deliver a communications improvement strategy. A key component will be web access for trustees, 1,700 members and 133 participating...

Annuity advice must stress OMO benefits.
May 19, 2008... Byline: Charlie Thomas Open market options (OMOs) should become the default practice for choosing an annuity, a leading investment provider has claimed. Hargreaves Lansdown has voiced its support of the Financial Services Authority's...

Wealth trumps SRI in eastern Europe.
May 19, 2008... Byline: Kalpana Fitzpatrick Institutional investors buying eastern European equities are happily placing their assets into gambling, tobacco and firms linked to weapon production. As activity for investing in eastern Europe picks up,...

News in brief.
May 19, 2008... The aggregate funding position of defined benefit (DB) pension schemes has improved to a surplus of GBP30.3bn. The surplus was the first in four months, but was smaller than the GBP88.3bn surplus in April last year, according to the Pension...

Fund manager skill to go under the spotlight.
May 19, 2008... Byline: Tom Willetts A new service to help pension funds ensure 130/30 fund managers offer value for money has been launched by manager evaluation firm Inalytics. The firm uses quantitative analysis of short trades to identify...

Brits lose faith in government on pension provision.
May 19, 2008... Byline: Charlie Thomas British workers no longer rely on the government to provide adequate provisions for their retirement, according to HSBC's latest Future of Retirement report. The UK has the highest declining confidence in the...

Risk-sharing schemes under threat from IASB.
May 19, 2008... Byline: David Rowley Risk-sharing pension arrangements could be wiped out by the recent proposed reforms to accounting standard IAS 19, according to Hewitt Associates. The new proposed standard by the International Accounting Standards...

Long cohort trigger will undermine 2004 act.
May 19, 2008... Byline: David Rowley The Pensions Regulator's selection of the long cohort projection as a 'trigger' for further scrutiny will have unintended consequences, the National Association of Pension Funds (NAPF) has stated. In its...

Local authorities tackle longevity with data analysis.
May 19, 2008... Byline: David Rowley A number of local authorities are working with Hymans Robertson on a project that attempts to better address longevity risk within their pension schemes. The London Pension Fund Authority (LPFA) is one of those...

Funding levels create GBP14bn surplus.
May 19, 2008... Byline: David Ricketts Pension schemes have increased their life expectancy assumptions by an average of half a year during 2007, according to Mercer. This has led to an average increase in liabilities of 2% for FTSE 350 companies - an...

Search for alternatives up by 20% worldwide.
May 19, 2008... Byline: David Rowley The increase in switches to alternative asset classes has been mapped by a survey of institutional investors by Mercer. The firm's Manager Search Trends: 2007 Year-End Report shows hiring patterns and trends around...

UK equity rise hiding fears over growth prospects.
May 19, 2008... Byline: David Rowley The recent revival in UK equities belies concerns over the future prospects for growth, according to a leading active equities manager. Leigh Harrison, head of UK equities and manager of the Threadneedle UK Equity...