Pensions Week articles from September 2008

Pensions Week archives from September 2008

News: Scheme smashes derisking target by three years.
September 1, 2008... Byline: Tom Willetts The GBP9.8bn British Steel pension scheme has defied volatile investment markets and completed a derisking exercise three years early. The scheme, which has 158,000 members, accelerated its five-year risk reduction...

News: Dasgupta to leave PPF.
September 1, 2008... Byline: Tom Willetts Partha Dasgupta, chief executive of the Pension Protection Fund (PPF), will stand down in June next year. Dasgupta said he wanted to move on to a new challenge - possibly one with a social element. He said:...

This week: Placing pensions on the podium.
September 1, 2008... Byline: Tom Willetts - Senior reporter I haven't watched Big Brother this summer, so this will officially be the first year I've gone without. I'd like to say I'd been leafing through Tolstoy's Anna Karenina in the original Russian and...

News: DB schemes are like 'gold dust' for firms.
September 1, 2008... Byline: Tom Willetts Near-extinct final salary schemes have become prized assets in the fight to retain employees, according to research from Aon Consulting. The firm's 2008 employer survey found that 81% of open defined benefit (DB)...

News: Tobacco scheme guarantees funds with banks' credit.
September 1, 2008... Byline: Tom Willetts The GBP2.9bn Imperial Tobacco pension scheme is fully funded on a winding-up basis after obtaining a guarantee from a group of banks. Under the contingent funding arrangement (CFA), the banks have written a letter...

News: Tesco agrees property leaseback deal.
September 1, 2008... Byline: Tom Willetts The GBP30bn Universities Superannuation Scheme (USS) and three institutional investors have taken part in a sale and leaseback deal with Tesco. Under the terms of the GBP605m deal, USS, PRUPIM, LaSalle Investment...

News: Insurers find fresh confidence in buyout.
September 1, 2008... Byline: Tom Willetts The number of employees in pension schemes where liabilities have been offloaded to an insurer could jump to almost 200,000 by the year's end. HSBC Actuaries and Consultants (HACL) predicts the size of buy-in and...

News: Govt running out of time for risk sharing.
September 1, 2008... Byline: Tom Willetts The government is expected to fail to introduce legislation making it easier to establish risk-sharing pension schemes before the next general election. The development will dismay the Association of Consulting...

News in brief.
September 1, 2008... The Pensions Regulator has published draft guidance on calculating cash- equivalent transfer values for members of DB schemes. DB scheme trustees will be responsible for taking decisions on how cash- equivalent transfer values are...

News: Derisking goals must be set out in advance.
September 1, 2008... Byline: Tom Willetts Scheme sponsors and trustees must set clear objectives for derisking strategies to avoid costly errors, a pensions consultant has warned. The call comes as a growing range of risk transfer options - including bulk...

News: Insolvency loan case a warning to trustees.
September 1, 2008... Byline: Tom Willetts The deputy pensions ombudsman (DPO) has found the trustees of the Greenup and Thompson pension scheme jointly liable for hundreds of thousands of pounds. The trustees, including member-nominated trustees, were...

News in brief.
September 1, 2008... The GBP552m Bradford and Bingley (B&B) pension scheme is keeping a close eye on its employer covenant after the lender's recent beleaguered financial performance. The scheme said it has safeguarded part of its portfolio after adopting a...

News: Schemes urged to assess funding ratios.
September 1, 2008... Byline: Tom Willetts Scheme trustees must switch their risk focus from assets to funding ratios to exploit investment opportunities in the market, according to a fund manager. Trustees have traditionally provided asset managers with...

News: Corporate bond ratings threaten scheme values.
September 1, 2008... Byline: Tom Willetts Regulatory changes in the US could lead to corporate bonds being downgraded, dealing a blow to pension scheme returns, according to Aon Consulting. The consultancy warned the Securities and Exchange Commission...

News in brief.
September 1, 2008... Standard Life Investment's Global Absolute Return Strategies Fund now has more than GBP600m assets under management. The fund has attracted over GBP250m of new investment this year from the Dollond & Aitchison, and Electrocomponents Group...

In depth: "I criticise an all-powerful regulator having more powers to interfere in schemes".
September 1, 2008... Byline: Tom Willetts Baroness Noakes feels let down after a trip to Glyndebourne, the exclusive opera house in the East Sussex countryside. Sitting in a cafe beneath MPs' offices in Portcullis House, the shadow minister for the Treasury in...

In depth: Beware the threat to market frameworks.
September 1, 2008... Byline: Lindsay Tomlinson The function of financial markets is to bring together providers of capital, ie savers, with the users of capital, ie corporations and governments. It has become generally accepted, sometimes in the teeth of the...

In depth: Personal view - The government's stance on compulsory annuitisation could batter people's savings.
September 1, 2008... Byline: Mona Patel The government has spent much time deliberating how to get people to save for their retirement. It finally adopted a radical approach in the form of personal accounts, which will see large numbers of hitherto non or...

In depth: Technical view - When two schemes become one.
September 1, 2008... Byline: Michael Hayles & Joseph Webster When a pension scheme merger occurs, and the assets and liabilities of two or more pension schemes are brought together as one scheme, a number of issues frequently arise. The merger is usually...

Industry watch: Governance - Many find favour with those who are at fault.
September 1, 2008... Byline: Tom Powdrill We've all come across people who don't like admitting they are wrong. The kind of person who, if something does go awry, can always find an external factor to blame, or some reason why they personally are not at fault....

Industry watch: Notice board - NAPF events and training.(Conference news)
September 1, 2008... NAPF annual conference & exhibition 2008 Better knowledge for better pensions October 8-10, Scottish Exhibition & Conference Centre, Glasgow For the first time, entry to the NAPF annual conference and exhibition is free to all NAPF...

Industry watch: View from the bridge.
September 1, 2008... Byline: Norman Russell Strikes This week, I was going to tell you about two recent cases requiring individual trustees to write out personal cheques (totalling GBP216,000). However, Clive Gilchrist got there first. I commend to you...

Pensions workout: Beginner - What is credit? - Beginners' level.
September 1, 2008... The fallout of the subprime crisis has left investors with attractive valuations across various asset classes. One interesting investment found in the fixed-income markets is credit. The term credit is generally applied to debt securities (as...

Special Focus: Introduction.
September 1, 2008... Byline: Charlie Kirby - Deputy editor Liability-driven investment (LDI) strategies are no longer seen as the investment panacea of the noughties. Managers recognise that lesser potential returns are the price to pay for a reduced range of...

Special Focus: Missed the boat.
September 1, 2008... Byline: Gill Wadsworth Only the very naive or the wildly optimistic could have believed that the GBP14bn pension fund surplus reported for the UK's FTSE 350 schemes in March would last. Sure enough, three months later normality resumed...

Special Focus: Shelter rom the storm?
September 1, 2008... Byline: Michelle Williams The credit crisis sweeping through global financial markets has revealed a number of vulnerabilities in the banking sector. This comes at a time when pension schemes are hurtling at record pace into long-term...

Specail Focus: Company focus - A word from the sponsor...
September 1, 2008... Background Legal & General Investment Management (LGIM) is one of the leading fund management groups in the UK, offering a full range of funds and services from index and active equities to bonds, property and cash through to transition...

On the move: HSBC consultancy continues to grow.
September 1, 2008... Byline: Tom Willetts HSBC Actuaries and Consultants (HACL) has strengthened its investment consultancy practice with two senior appointments and a string of promotions. Alex Weiland joins as a senior investment consultant from...

On the move: Going places.
September 1, 2008... Toms swaps DB for DC at Alexander Forbes Alexander Forbes Trustee Services has promoted Darren Toms to associate director to develop its defined contribution (DC) services for trustees. Toms joined the firm in 2000 and was previously...

On the move: Top 4 moves.
September 1, 2008... 01 - David Norman OLD - Norman was director of marketing and products at Morley Fund Management NEW - He becomes the first chief executive of Credit Suisse's UK and Ireland asset management business Tel: 020 7888 1000 02 -...

News: Barometer helps calculate buy-in viability.
September 8, 2008... Byline: Charlie Kirby An online buy-in quote generator has been launched by Hewitt Associates to help trustees discover if the cost of insuring pensioner liabilities is financially viable. The firm's Buy-In Barometer website lets...

News: And it's all gone quiet over there.
September 8, 2008... Byline: Charlie Kirby - Deputy editor A fortnight after the GP Noble case broke, all industry commentators appear to have gone silent. Market rumours claiming charges being brought by the Serious Fraud Office (SFO) were just days away,...

News: Lib Dems poised to fight pensions bill.
September 8, 2008... Byline: Tom Willetts The Liberal Democrats have vowed to defeat the government over the pensions bill when it returns to the House of Lords after the summer recess. The government could be forced to do a U-turn on amendments to the...

News: Letter.
September 8, 2008... It came as no great surprise to read of politicians demanding a further review of public sector pensions (PW 18.08.08). Recent reforms fell well short of the promised radical overhaul and have done little to secure the long-term affordability...

News: Focus' former owners forced to pay out GBP8m.
September 8, 2008... Byline: Charlie Kirby Focus DIY's pension fund has received an GBP8m top-up from its former owners Duke Street Capital, under direction from the Pensions Regulator. This marks the first time the regulator has used its powers to force...

News: UK council funds lose rights to millions.
September 8, 2008... Byline: Tom Willetts Local authority pension schemes have lost out on millions in damages after failing to participate in class action law suits in US courts. Their failure to participate in US securities class actions has neglected a...

News in brief.
September 8, 2008... A proposal to let pension schemes convert accrued guaranteed minimum pension rights into ordinary scheme benefits is being looked at by the government. The proposal is contained in a consultation document on contracting out regulations...

News: C&W provides Pru with record buy-in contract.
September 8, 2008... Byline: Tom Willetts Prudential has signed the largest ever buy-in transaction with the GBP2bn Cable & Wireless pension scheme. Under the terms of the deal, the insurer will provide a GBP1bn bulk annuity policy to pay the benefits of...

News: PIC secures major enhanced benefits deal for UK Can.
September 8, 2008... Byline: Tom Willetts A scheme with a liquidated sponsor has secured higher pension benefits than it could have received under the Pension Protection Fund (PPF). Under the terms of the deal, Pension Insurance Corporation (PIC), the...

News: PPF takes on a dozen schemes in August.
September 8, 2008... Byline: Tom WIlletts Twelve pension schemes, with more than 3,500 members in total, transferred into the Pension Protection Fund (PPF) last month. Since it was set up in April 2005, the PPF has taken on 57 schemes and secured the...

News: PA risk to small firms.
September 8, 2008... Byline: Tom Willetts More than half of small company schemes face failing the exemption test for personal accounts, according to the Association of Consulting Actuaries (ACA). A poll of firms with up to 250 staff also found that more...

News: Admin standards must improve.
September 8, 2008... Byline: Tom Willetts Trustees must make a sustainable investment in administration to meet member expectations, according to a poll of companies by Aon Consulting. The survey was conducted at the firm's administration service...

News: Investment comment - Generating positive returns in a crisis.
September 8, 2008... Byline: Andrew Welch The nature of pension fund investment has evolved radically in recent years. As we approached the end of the 1990s, investment strategies had progressed from the old balanced approach, but were still largely based on...

News: DB sponsors to curb spending next year.
September 8, 2008... Byline: Tom Willetts Two-thirds of sponsors will slash contributions to their pension scheme next year after failing to reduce their deficits, according to Aon Consulting. Many companies disclose their estimated contributions for the...

News: Directors must come clean on benefits.
September 8, 2008... Byline: Tom Willetts The Trades Union Congress (TUC) is calling for greater scrutiny and improved disclosure of the remuneration and pension benefits of company directors. The TUC's sixth annual PensionsWatch survey found that only...

News in brief.
September 8, 2008... The TH White pension scheme has appointed Lane Clark & Peacock (LCP) to provide investment consulting services. LCP will provide asset liability modelling, manager selection and asset transfer advice, and pension scheme monitoring. ...

Asset news: LDI take-up doubles with volatility surge.
September 8, 2008... Byline: Tom Willetts The number of pension schemes following a liability-driven investment (LDI) strategy doubled last year, according to research from fiduciary manager SEI. A poll conducted by the firm's pension management research...

Asset news: Fund performances remain unstable.
September 8, 2008... Byline: Tom Willetts Credit spreads are unlikely to narrow until the housing market stabilises, according to bond managers. A poll by Standard & Poor's Fund Services (S&PFS) of 39 managers found they believe spreads will remain wide...

News in brief.
September 8, 2008... Active UK equity managers returned -3.7% net of fees in July, according to BNY Mellon Asset Servicing, 0.1% behind the FTSE All-Share Index. There were negative returns in all major equity markets, and despite managers moving money into...

In depth: Talking heads.
September 8, 2008... Byline: Charlie Kirby 1 - Where do you believe the biggest conflicts of interest arise in pensions today? 2 - In 2005, the Law Debenture trust wrote: "It is appropriate for trustees to insist the scheme actuary will not advise the...

In depth: Immigrants' pensions need to be funded, too.
September 8, 2008... Byline: Frank Field A few hopeful but crassly ignorant observers greeted the latest population projections with glee, seeing them as an answer to our pensions time-bomb. Nothing could be further from the truth. The European Commission's...

In depth: Personal view - FTSE raises a toast to the successful marriage of the ETF and the index.
September 8, 2008... Byline: Imogen Dillon Hatcher Exchange traded funds (ETFs) has become the institutional investment tool of choice, often seen as a low cost and flexible way to access the potential rewards of the market. According to Morgan Stanley, at the...

In depth: Technical view - Risk-sharing offers a flexible solution.
September 8, 2008... Byline: Michelle Lewis With the deadline for responding to the Department for Work and Pensions (DWP) risk-sharing consultation passed, many of us in the pensions industry are left waiting to see if and when the government will make the...

Industry watch: Governance - Nice big nest egg for high-earning execs.
September 8, 2008... Byline: Tom Powdrill Last week saw the Trades Union Congress (TUC) publish its annual PensionsWatch report, which scrutinises the pensions available to directors in the UK's largest companies. It's one of a small number of pieces of...

Industry watch: Notice board - NAPF events and training.(Conference news)
September 8, 2008... NAPF trustee conference 2008: understanding and controlling risk November 26 One Great George Street, Westminster The environment in which pension scheme trustees have to function is becoming increasingly complicated. Now more than...

Industry watch: my life outside pensions.
September 8, 2008... Byline: Miles Kite When asked "Are you up to much at the weekend?" in London & Colonial's investment offices, Miles Kite admits he's in the minority when he replies: "I've got a band rehearsal tonight" or "I'm playing a gig on Saturday"....

Pensions workout: Intermediate - Credit: the european credit universe - Intermediate level.
September 8, 2008... The global credit universe is immense and European investors have about 40% of this market right at their doorstep. While the European credit market is smaller than its US counterpart, Europe benefits from several distinct advantages. The most...

On the move: Jacob leads listed assets at Henderson.
September 8, 2008... Byline: Tom Willetts Henderson Global Investors is promoting David Jacob to chief investment officer and managing director of listed assets, the firm's fixed income and equities business. Jacob will leave his roles as head of fixed...

On the move: Going places.
September 8, 2008... Burnett rises up the DC ranks at Mercer Mercer has promoted Craig Burnett to defined contribution (DC) consulting leader for Europe. In his new role, Burnett will grow the firm's DC pensions business and develop innovative approaches...

On the move: Top 4 moves.
September 8, 2008... 01 - Alex Weiland and John Franks OLD - Weiland was senior investment consultant at Gissings, and Franks was head of fixed income at the Co-operative Insurance Society NEW - They move to HSBC Actuaries and Consultants. Weiland becomes...

News: FSA vague over buyout insolvency.
September 8, 2008... Byline: Tom Willetts The Financial Services Authority (FSA) has failed to quell growing concerns that its insurance lifeboat scheme would not cover all pension buyout firms. Over the past few months consultants and lawyers have aired...

News: Government moots sharing GBP55bn surplus.
September 15, 2008... Byline: Tom Willetts Surpluses could be shared between employers and members under radical government ideas sent to influential pension firms and groups. The paper outlines seven ways rules governing surpluses could be relaxed,...

News: BA pumps GBP50m into new scheme.
September 15, 2008... Byline: Tom Willetts Newly-published statistics reveal that British Airways (BA) has recently injected GBP50m to cut the deficit of its most underfunded pension scheme. The special contribution to the airline's GBP7.3bn 'new airways'...

This week: Zen and pensions maintenance.
September 15, 2008... Byline: David Rowley - Editor What is the perfect holiday for those who work in the busy, complex world of pensions? Something relaxing, destressing, not involving too many medieval cathedrals, challenging pieces of sculpture, crowded...

News: O2 highlights poor UBS record to DC members.
September 15, 2008... Byline: David Rowley The O2 defined contribution (DC) scheme has written to members highlighting concern at the performance of UBS Global Asset Management. The fund manager was dropped from a global equity brief with O2's defined...

News: Hedge funds go through the roof for Hewitt's clients.
September 15, 2008... Byline: Tom Willetts Hewitt Associates has reported soaring hedge fund allocations for clients over the last two years as schemes seek to control their exposure to market volatility. It says that pension schemes and fund managers are...

News: Friends Provident urged to refocus DC strategy.
September 15, 2008... Byline: David Rowley Consultants have warned Friends Provident that it risks being overtaken by competitors if it fails to refocus its pensions proposition. The firm is on a charm offensive to win back favour with consultants after...

News: Larger funds influence board make-up.
September 15, 2008... Byline: Charlie Kirby Large pension funds are ensuring their voices are heard at the companies they invest in, according to the National Association of Pension Funds (NAPF). The engagement activities of pension funds have led to a rise...

News in brief.
September 15, 2008... Hargreaves Lansdown has warned that annuity rates are likely to fall. The consultancy noted that seven leading annuity rate providers had dropped their rate by as much as 2% in August 2008. Nigel Callaghan, pensions analyst at...

News: Nationwide banks on infrastructure.
September 15, 2008... Byline: Charlie Kirby Infrastructure investments have proved the one bright note for the GBP1.8bn Nationwide Pension Fund, which lost -2.9% over the year to the end of March. The fund's 3.3% holding in European infrastructure with...

News: Extra payments to FTSE 350 schemes continue to rise.
September 15, 2008... Byline: David Rowley Special contributions to pension schemes have risen for the third year in a row, according to Mercer and the Association of Corporate Treasurers. The two organisations have produced a report that calculates the...

News: Calls for public sector pensions review.
September 15, 2008... Byline: Tom Willetts The government is under mounting pressure to launch an independent review of public sector pensions and abandon contracting out to prevent a fiscal crisis. Opaque public sector pension costs must be urgently...

News: NAPF hails positive move on Solvency II.
September 15, 2008... Byline: Charlie Kirby Defined benefit (DB) schemes will not be forced into Solvency II regulations, according to a European Commission consultation paper. The document states that Solvency II rules will only be applied to schemes that...

News: ICI diversifies with high yield bonds.
September 15, 2008... Byline: David Rowley The GBP7bn ICI Pension Fund has increased its weighting in high yield bonds from 2% to 2.5% of its portfolio. The closed fund, whose membership is almost entirely made up of pensioner and deferred members, has 82%...

News in brief.
September 15, 2008... An annuity that offers an income based on five different health risks has been launched on a pilot basis by Legal & General. The insurer claims an individual could benefit from an extra 12% income with its Annuity Plus product compared with...

News: Environment Agency picks greener funds.
September 15, 2008... Byline: David Rowley The Environment Agency has cited fiduciary responsibility in its favouring of environmentally-focused fund managers over established players. The agency's GBP1.5m active pension fund has awarded global equity...

News: Buyout costs mean less business in 2008.
September 15, 2008... Byline: Tom Willetts Buyout business will be closer to GBP8bn this year rather than insurers' projected GBP15bn for bulk annuities, according to Punter Southall Transaction Services. The projection comes despite Prudential's GBP1bn...

News: Savings crisis.
September 15, 2008... The latest calculation on those of us not saving enough for our retirement is 49%, according to a new Scottish Widows survey. The finding came from a poll of 6,000 people, all earning at least GBP10,000. Scottish Widows point out that the...

Asset news: Asian market shortfall sees FoH funds suffer.
September 15, 2008... Byline: David Rowley Poor coverage in Asian and emerging markets is a key reason for an underwhelming fund-of-hedge fund performance this year, according to Standard & Poors. The ratings agency's fund services division calculated that...

Asset news: South Africa offers other investment gems.
September 15, 2008... Byline: Charlie Kirby South Africa is a viable long-term investment option due to its infrastructure opportunities, according to StanLib. The Johannesburg-based asset management operation of the Standard Bank of South Africa claims...

News in brief.
September 15, 2008... Axa Investment Managers (Axa IM) has split its fixed income division into two teams, covering credit and interest rates. It believes this will better able it to follow investment themes, rather than being product-led. The interest rate...

In depth: "We usually try to sum up the APL as having a policy of not having a policy".
September 15, 2008... Byline: Tom Willetts Alastair Meeks reckons he shares a hobby with inspector Piet van der Valk, star of the cult 1970s detective series. When not solving gritty vice crimes, the Dutch police inspector turned his hand to building a house in...

In depth: A second opinion in times of change.
September 15, 2008... Byline: Raj Mody The other week we waved farewell to our summer interns. Probably a temporary farewell - they were an excellent bunch and all left with job offers from us in hand, inviting them to return this time next year. Being...

In depth: Personal view - The key to good trusteeship is to excel in education and training.
September 15, 2008... Byline: Jamie Clark For trustees, when it comes to learning, training and education both have a part to play. Which is better will largely depend on the individual and the extent to which each individual trustee is involved in the pension...