Pensions Week articles from October 2008

Pensions Week archives from October 2008

News: Stock stays on loan at major funds.
October 6, 2008... Byline: Tom Willetts Large pension schemes are continuing to lend stock amid fears they will lose millions of pounds in revenue if they pull out of lucrative deals. A group of multi-billion pound schemes announced a review of the...

News: From lifestyle to diversity.
October 6, 2008... Byline: Charlie Kirby Default funds are turning away from traditional lifestyle funds towards multiple asset class diversification, according to PensionDCisions. The research firm's latest report, the 2008 DC Default Provider Survey,...

This week: A perfect storm for opportunists.
October 6, 2008... Byline: David Rowley - Editor It is a somewhat guilty feeling to be hearing of what might be the upside to all this market chaos. The last few weeks have been a bad time to issue good news, yet slowly but surely people have started to...

News: Funds cash in on corporate bonds.
October 6, 2008... Byline: David Rowley "Huge opportunities" for bargains in credit markets have opened up for pension funds in recent weeks, according to implemented consultants and fund managers. As banks have sought to deleverage their positions,...

News: Better funding for DB may be wolf in sheep's clothing.
October 6, 2008... Byline: Charlie Kirby Defined benefit (DB) schemes showed a GBP19bn improvement in funding last month. Research from Aon Consulting shows while DB schemes are still in deficit following the horrendous downturn in the markets this...

News: Protests as MP scheme profits from short-selling.
October 6, 2008... Byline: Charlie Kirby Bank staff rallied against MPs' pensions benefiting from short-selling at the Conservative party conference last week. Over 50 staff from Lloyds TSB and HBOS donned 'capitalist pig' masks and held placards...

News: Pensions bill changes target personal accounts.
October 6, 2008... Byline: Tom Willetts Peers have tabled amendments to the pensions bill, which reaches the report stage in the House of Lords tomorrow. The Conservatives have proposed a change to the qualifying earnings for personal accounts, while...

News in brief.
October 6, 2008... The BP Pension Fund has formed a GBP100m UK investment fund to take advantage of depressed property prices. BP's Ropemaker Properties will have a fund worth an initial GBP50m of equity, 80% of which will be provided by BP, and the remainder...

News: Caution advised over long cohort benchmark.
October 6, 2008... Byline: David Rowley The long cohort is overestimating improvements in mortality, according to early indications from Hymans Robertson's Club Vita project. The actuarial consultancy has collated the data from 100 pension funds across...

News: Burgeoning buyout demands more capacity.
October 6, 2008... Byline: Tom Willetts Buyout market capacity must grow by about GBP250bn over the next three years to meet demand from trustees, according to research from Pension Insurance Corporation. The capacity requirement represents an increase...

News: PPF urged to show mercy for at-risk firms.
October 6, 2008... Byline: Tom Willetts Vulnerable companies should be exempted from paying the Pension Protection Fund (PPF) levy in an economic downturn, according to the Occupational Pensions Trusts (OPT). The buyout firm believes the levy could...

News: DC providers fall short of trustees' expectations.
October 6, 2008... Byline: Tom Willetts More pension sponsors and trustees believe their defined contribution (DC) provider offers a less satisfactory service than four years ago, according to research by Watson Wyatt. The firm's annual survey found that...

News: Overdiversifying cash could prove risky.
October 6, 2008... Byline: Charlie Kirby Trustees must not blindly diversify their cash investments in a knee-jerk reaction to the collapse of UK banks, urged Scottish Life. Diversifying cash investments across too many institutions could leave funds...

News in brief.
October 6, 2008... Clarification: Nick Flint set up an office in Budapest for Hewitt Associates, not for Hymans Robertson (PW 22/09/08). The latest bi-annual National Association of Pension Funds (NAPF) Workplace Pensions Survey has found that employee...

News: Private equity not a catalyst for PPF risk.
October 6, 2008... Byline: Charlie Kirby Pension schemes owned by private equity firms are less likely to fall into the Pension Protection Fund (PPF), according to Close Brothers. The opinion, backed by research, runs counter to perceptions that private...

News: Clients choose flexible delegation with Watson Wyatt.
October 6, 2008... Byline: Charlie Kirby Watson Wyatt has tempted 30 clients into its Advanced Investment Solutions (AIS) consultancy service. The UK-based clients, which include the Merchant Navy Officers' Pension Fund (MNOPF), are among the first to...

News: IMA welcomes clarity on conflicts.
October 6, 2008... Fund managers have supported the Pensions Regulator's guide to conflicts of interest. Richard Saunders, chief executive at the Investment Management Association, said: "Up until now, there has been no regulatory oversight of how...

News: UK managers back US recovery plans.
October 6, 2008... Byline: David Rowley Leading fund managers have expressed their support for the US government's $700bn (GBP397bn) support package for its ability to stabilise equity prices. Against widespread criticism of the plan for condoning...

News: Equities remain a good investment.
October 6, 2008... Byline: David Rowley The earnings potential on many UK equities makes the risk of buying them in current conditions worthwhile, believe fund managers. Richard Buxton, head of UK equities said the turmoil in markets was a good buying...

News in brief.
October 6, 2008... Leverage and exotic financial instruments will fade and with them the bumper profits of financial services companies, believes a leading fund manager. Jeff Arricale, lead portfolio manager of the T. Rowe Price Financial Services Strategy,...

In depth: "I watch with incredulity the lack of any sort of policy to encourage people to save".
October 6, 2008... Byline: Charlie Kirby Having dipped his toes into most financial sectors, it's pensions and savings that intrigue Lord Hunt most these days. His experience with financial matters is often called upon in the House of Lords, where he remains...

In depth: Blamers beware of short-sightedness.
October 6, 2008... Byline: Lindsay Tomlinson Throughout the last year we have been learning to live with the credit crunch. This has felt like a slow-motion train crash. The problems first started to manifest in early summer 2007, when the term 'sub prime'...

In depth: Personal view - Pension schemes need to be poised to pounce on market opportunities.
October 6, 2008... Byline: Chetan Gosh Is there a place for delegated consulting? Pension schemes' traditional approach of meeting quarterly to agree investment decisions means important investment opportunities are missed in today's fast-moving market. The...

In depth: Jargon buster.
October 6, 2008... Derivatives Something you can buy or sell, the price of which depends on the price of something else - a share or a bond, currency or even the weather - for its own value. Options are usually discussed when talking about derivatives....

In depth: Technical view - Derivatives is not a dirty word.
October 6, 2008... Byline: Martin Johnson Pension fund trustees are under threat on all sides from a 'perfect storm' of adverse market conditions that are among the worst in living memory. With an economic recession now in full swing and massive falls in the...

Industry watch: Governance - Bank bail-outs could open a can of worms.
October 6, 2008... A couple of weeks ago, I argued it was notable that there had been little comment from large shareholders such as pension funds on very live market issues like short-selling. Given the fact that the practice has been blamed for exacerbating the...

Industry watch: Notice board - NAPF events news.
October 6, 2008... Duty calls A survey of over 300 HR managers carried out by Personnel Today on behalf of the NAPF has found that pensions continue to be an integral and important part of many company remuneration packages. The survey found that 91% of...

Industry watch: My life outside pensions.
October 6, 2008... Byline: Kenneth Donaldson Why? This is the most obvious question to ask Kenneth Donaldson, director and senior actuary at Capita Hartshead, on his feat in running 175 miles in a week in searing temperatures in De Hoop National Park in...

Pensions workout: Intermediate - Alternatives - Intermediate level.
October 6, 2008... Driven by the attractive risk/reward benefits offered by the main three alternative asset classes - real estate, private equity and hedge funds - more and more institutional investors are taking the plunge. In this intermediate guide to...

On the move: Putting experience first at BNY Mellon.
October 6, 2008... Byline: Tom Willetts BNY Mellon Asset Management has snapped up Simon Putt as director and head of UK institutional client relationship management to boost its client relationship team. Working with ateam of client account managers,...

On the move: Going places.
October 6, 2008... Double whammy for Aon managers Aon Consulting has promoted two members of its management team to senior positions. Chris Simmons has been appointed national operations manager in the benefits solutions division, while Andrew Leslie...

On the move: Top 4 moves.
October 6, 2008... 01 - John Cacchioli OLD - He was outsourcing service delivery director at information technology services firm Unisys NEW - He becomes chief administration officer at MetLife Europe Tel: 0870 909 9458 02 - James Buckley ...

DCi Supplement: Introduction.
October 6, 2008... Byline: David Rowley - Editor An apology: there are so many new ideas on DC within these pages, you will struggle to know what to do with them all. Clearly though, adopting some of them is going to put your employer at a big advantage over...

DCi Supplement: 10 of the best.
October 6, 2008... Byline: David Rowley Few doubt that defined contribution (DC) could be improved. Here, we present some of the most popular and brave ideas being talked about - and in some cases put into practice. 1) Giving control of 20% of pension...

DCi Supplement: Talking heads.
October 6, 2008... 1 - Are you in favour of greater public knowledge of the comparative performance of default funds? 2 - Should the new default fund become a diversified growth fund? 3 - Is daily reporting of fund values a good thing for employees? ...

DCi Supplement: Snapshot survey.
October 6, 2008... Byline: Charlie Kirby Annual management charges When asked whether charging deferred members a higher annual management charge for their defined contribution (DC) pension pots was a possibility, most of the trustees asked said they...

DCi Supplement: DC: The numbers.
October 6, 2008... Key findings - Association of Consulting Actuaries The majority of existing schemes would fail personal accounts exemption test, according to the beliefs of 55% of firms. While opt-outs from personal accounts are also expected to be...

DCi Supplement: 57 varieties of default funds.
October 6, 2008... The 'default fund' is a generic term for those who lack the will or the information to make a choice on how to invest their defined contribution (DC) pension, but it is often bandied about as if it were a particular type of investment strategy....

DCi Supplement: Interview: Greg Thorley, Standard Life.
October 6, 2008... Pensions are simply a contemporary vehicle, typically used to help people maintain their standard of living in retirement. The most effective way to engage potential savers is to ask them to consider what is important to them to continue to...

DCi Supplement: Four steps to success.
October 6, 2008... Byline: Mark Rowlands When it comes down to it, there are a number of major problems facing our industry. The majority of defined contribution (DC) pension schemes will fail to deliver adequate replacement income in retirement. This is for...

DCi Supplement: A strong choice.
October 6, 2008... The challenges facing defined contribution (DC) pension schemes are wide and varied, but are not insurmountable, according to a recent DC trustee survey undertaken by JPMorgan Asset Management and Engaged Investor. The survey asked 88 DC...

DCi Supplement: DC: Born to evolve.
October 6, 2008... We seem to have a need to segment everyone depending on our habits and beliefs. Smoker or non-smoker. Pro-nuclear or wind turbines. Motorist or cyclist. These seemingly harmless factions of society give rise to endless discussion and debate....

DCi Supplement: Don't believe the hype.
October 6, 2008... Around A-day, there was a great deal of restructuring in the defined contribution (DC) world. Many smaller employers operating trust-based DC schemes took the opportunity to trade those in for group personal pensions (GPPs). That made perfect...

DCi Supplement: One idea.
October 6, 2008... Mark Rowlands - Head of corporate partnerships, Axa Corporate Benefits What is the biggest single factor that can improve the defined contribution (DC) retirement landscape? In my opinion it is improved scheme governance, combined with...

DCi Supplement: Company profiles.
October 6, 2008... Company: Axa Corporate Benefits Contact name: Mark Rowlands Job title: Head of corporate partnerships Address: Corporate Benefit Solutions, Scandinavia House, 2-6 Cannon Street, London EC4M 6AX Email:...

News: Knee-jerk reactions not required.
October 13, 2008... Byline: David Rowley No emergency measures are needed to protect the health of pension schemes, the National Association of Pension Funds has said. While the NAPF is running several campaigns for lighter regulation for final salary...

News: Broad support for suspension of annuity rule.
October 13, 2008... Byline: Charlie Kirby The pensions industry has rallied behind the Conservatives' call to suspend compulsory annuitisation at 75 years old. Chris Grayling, shadow secretary of state for work and pensions, has demanded the immediate...

This week: There may be trouble ahead.
October 13, 2008... Byline: David Rowley - Editor Anyone who was on the verge of going to this year's NAPF conference and then decided against it should skip this part of the magazine. In previous years, there was a real feeling that you were going to...

News: NHS sets benchmark for flexible working.
October 13, 2008... Byline: David Rowley The NHS is encouraging employees to switch to a new pension with a later than normal retirement date to help with staffing shortfalls. There is a disproportionate number of people over the age of 40 in the NHS and...

News: PPF plays fair with plans for risk-based levy.
October 13, 2008... The Pension Protection Fund (PPF) is to shortly publish proposed changes to its risk-based levy to help make it fairer and more stable. Highlights of the proposals revealed at the National Association of Pension Funds conference include...

News: FAS members left out in the cold by bank deals.
October 13, 2008... Byline: Charlie Kirby & David Rowley Financial Assistance Scheme (FAS) members have reacted angrily to the disparity between deals that give full guarantees for savings, but cutbacks to their pensions. James Purnell, secretary of state...

News: Mis-selling fears scare firms away from ETVs.
October 13, 2008... Byline: Tom Willetts Large employers are steering clear of enticing members to leave schemes with enhanced transfer value exercises (ETVs), as they fear being embroiled in mis-selling scandals. The effectiveness of the inducements has...

News in brief.
October 13, 2008... Clarification on the regulators' new powers is expected to be unveiled this week, according to work and pensions minister James Purnell, speaking at the NAPF conference. Those that had seen details of the clarification said it was good...

News: Norgrove justifies high levels of regulation in UK.
October 13, 2008... Byline: Owen Walker David Norgrove, chairman of the Pensions Regulator, has defended the UK's levels of regulation and warned critics to be careful what they wish for. Responding to a National Association of Pension Funds (NAPF)...

News: Short-selling should be encouraged, says NAPF.
October 13, 2008... Byline: David Rowley The chairman of the National Association of Pension Funds (NAPF) has urged the ban on short-selling by the Financial Services Authority to be lifted. Speaking at the NAPF conference, Chris Hitchen described...

News in brief.
October 13, 2008... The Civil Service Pensioners' Alliance (CSPA) is calling on peers to reject a Liberal Democrat amendment to the pensions bill which would introduce a commission to review all public sector pensions. Mike Duggan, general secretary of the...

News: FTSE falls threaten alternative annuities.
October 13, 2008... Byline: Charlie Kirby The recent falls in the FTSE could have a dramatic impact on third way annuities, according to providers. Alternative options to single lifetime annuities are often linked to equities and FTSE products, putting...

News: NAPF to recognise best DC schemes.
October 13, 2008... Byline: David Rowley Employers must pump at least 6% into their defined contribution (DC) schemes to pass a new quality mark test launched by the National Association of Pension Funds (NAPF) last week. The test is aimed at educating...

News in brief.
October 13, 2008... Hornbuckle Mitchell has joined the Conservatives in calling for an end to compulsory annuitisation. Marketing director Mary Stewart said it was unfair to force employees to switch a lifetime of accu-mulated pension savings into an annuity...

News: Industry baffled by pensions reshuffle.
October 13, 2008... Byline: Charlie Kirby The mass restructure of the Department for Work and Pensions (DWP) has left the industry in a state of shock. Gordon Brown's reshuffle saw former pensions minister Mike O'Brien replaced by Rosie Winterton, and...

News: Drake takes on role of interim head at PADA.
October 13, 2008... Byline: Owen Walker Jeannie Drake will act as intermediate chairman of the Personal Accounts Delivery Authority (PADA) while the organisation searches for Paul Myners' successor. James Purnell, the secretary of state for work and...

News in brief.
October 13, 2008... Premier Pensions Management (PPM) has been appointed to administer financial giant Nomura's closed UK occupational plan. The plan has 3,000 members. David Farrant, chairman of the trustees, confirmed the appointment of PPM and said it...

News: Global extra-financial organisations merge.
October 13, 2008... Byline: Tom Willetts The GBP30bn Universities Superannuation Scheme (USS) has welcomed a plan to merge the Enhanced Analytics Initiative (EAI) and the Principles for Responsible Investment (PRI). The two organisations will join forces...

News: UK schemes have fixed income domestic bias.
October 13, 2008... Byline: Tom Willetts Pension schemes should adopt global fixed income mandates, according to Baring Asset Management. Exploiting global investment opportunities diversifies away from the UK's distorted bond markets, according to the...

News in brief.
October 13, 2008... American Century Investments, a privately held asset management firm with more than $84bn under management, has opened a London sales office. The firm has appointed as a senior vice-president Michael Green - who was most recently CEO of...

In depth: "This year we have written GBP1bn of business, and we had a ludicrously high share last year".
October 13, 2008... Byline: Tom Willetts More than one journalist has remarked that Mark Wood, chief executive of buyout firm Paternoster, bears a passing physical resemblance to James Bond actor Sir Roger Moore. Both are certainly well-groomed and...

In depth: Chance for Tories to turn the tide.
October 13, 2008... Byline: Frank Field Attention has rightly been concentrated on preventing a banking collapse, but the record fall in share prices will have huge repercussions in the wider economy. Collapsing stock markets will ricochet on to pension...

In depth: Personal view - Index-savvy investors should look to diversified funds before the frog croaks.
October 13, 2008... Byline: Ashish Kapur Just as the trick to cooking a frog is to place it in a pan of cool water, then slowly turn up the heat until it eventually croaks, inflation can reduce any positive investment returns and salary increases into...

In depth: Jargon buster.
October 13, 2008... Equitisation In pension fund circles, the word is often used to refer to ways of getting equity returns from cash that might otherwise just be sitting around. Specifically, equitisation may refer to cash available to be called on for...

In depth: Technical view - Close the gate on paying for failure.
October 13, 2008... Byline: David Paterson The ongoing crisis in the financial sector here and around the world has prompted much comment on the role of large pay packets in encouraging excessive risk-taking by executives. We remain unconvinced by the calls...

Industry watch: Governance - Steering the banks in the right direction.
October 13, 2008... Byline: Tom Powdrill It seems that each week, developments in the financial system pull the rug out from under long-held assumptions about how companies and markets operate. By the time you read this article it will no doubt already...

Industry watch: Notice board - NAPF events news.
October 13, 2008... Duty calls A survey of over 300 HR managers carried out by Personnel Today on behalf of the NAPF has found that pensions continue to be an integral and important part of many company remuneration packages. The survey found that 91% of...

Industry watch: View from the bridge.
October 13, 2008... Byline: Norman Russell Break from the Norm I have not written this column for a while. My thanks to my colleagues who have filled in for me. I was away for a late summer holiday in Greece, more of that anon. When I returned, the...

Pensions workout: Advanced - Alternatives: Real assets - Advanced level.
October 13, 2008... More than ever, investors are looking for effective ways to manage inflationary pressures and market volatility, and despite the current financial upheaval, pension fund requirements to generate sufficient real growth to pay future liabilities...

Special Focus: Introduction.
October 13, 2008... Byline: Charlie Kirby - Deputy editor Ever heard the expression: "Too many cooks spoil the broth"? When it comes to diversifying portfolios, appointing an array of specialist managers may seem like an easy way out, but it can increase...

Special Focus: Netting the biggest haul.
October 13, 2008... Byline: Matthew Craig Investing in a wide range of different assets is seen as one of the keystones to a successful investment policy for pension funds. Diversification, we are told, is the only free lunch in investing. But while...

Special Focus: Incorporating the entire spectrum.
October 13, 2008... There is now a wide range of multi-asset or diversified growth funds available to pension scheme trustees. There does not seem to be any universally-agreed definition of what constitutes a multi-asset or diversified growth fund, so how do you...

Special Focus: Company focus - A word from the sponsor...(Company overview)
October 13, 2008... Background Threadneedle was founded in 1994 and manages more than GBP60bn* of assets. Offering successful investment solutions is its only business, and many types of clients worldwide now benefit from its informed decision...

Special Focus: Striving for balance.
October 13, 2008... Byline: Ian Harvey Pension funds have moved away from awarding managers multi-asset briefs in favour of adopting multi-specialist arrangements, by which fund managers are entrusted with specific, specialist mandates. Notwithstanding this...

Special Focus: Company focus - A word from the sponsor...
October 13, 2008... Background BNY Mellon Asset Management offers excellence through specialisation. Its unique asset management model is ideally structured to provide best-in-class pooled fund solutions to meet the needs of pension investors. It distributes...

On the move: Armitage awarded top DC role at HACL.
October 13, 2008... Byline: Tom Willetts HSBC Actuaries and Consultants (HACL) has promoted Paul Armitage to head of defined contribution (DC) to develop new ideas and products. Armitage joined the firm as a consultant in 1997 and has 20 years'...

On the move: Going places.
October 13, 2008... Field Fisher Waterhouse clinches Calvert Law firm Field Fisher Waterhouse has poached Michael Calvert from a rival firm to join the company as a partner. Calvert has nearly 20 years' experience in pensions law and most recently worked...

On the move: Top 4 moves.
October 13, 2008... 01 - Simon Putt OLD - Head of investment communications at Fidelity NEW - Putt becomes director and head of UK client relationship management at BNY Mellon Asset Management Tel: 020 7163 5566 02 - Chris Simmons and Andrew...

News: Govt U-turn on regulator's new powers.
October 20, 2008... Byline: Tom Willetts The government has been forced to backtrack over plans to give sweeping new powers to the Pensions Regulator. Responding to sustained pressure from the Conservatives and business, the government has narrowed the...