The Greater Manchester Pension Fund has written a special message to its members assuring them that their pension is safe in the current financial crisis.

There is little effing and blinding to be found in the pages of Pensions Week. But if there were, it would most likely come from exasperated employers over the escalating amounts of money they are leaking to support the Pension Protection Fund (PPF).

The Pension Protection Fund (PPF) is to keep its 2009/2010 levy close to last year’s to reflect the financial difficulties facing many employers and schemes.

The BP pension fund is to hold steady on its exceptionally high allocation to equities despite the unprecedented turmoil in world financial markets.

Employees in BT’s £203m defined contribution (DC) plan have seen the value of their pension assets fall by £13m.

The fall for the year to the end of March is revealed in the plan’s latest annual report, which shows that members hold 92% of their investments in equities.

Trustees of the two Sea Containers pension schemes have won a US court battle to lay claim to assets from their sponsoring employer.

In the case, which was held in a Delaware bankruptcy court, the trustees faced opposition from hedge funds that were also creditors of Sea Containers.

The £1.3bn Thales UK Pension Scheme has appointed Cardano as a ‘proactive’ investment adviser.
The fund, which already uses swaps and hedge funds, is exploring a broader investment strategy with the aim of becoming upper quartile in terms of investment governance and performance.

Clients of Hewitt Associates have seen a 4% rise in their liabilities after most switched to the medium cohort as a basis for mortality assumptions.

Schemes can adopt longevity assumptions that reflect their demographic profile after the Pensions Regulator retreated over its mortality trigger proposal.

Participation in class action lawsuits has soared among large pension schemes this year, according to data from the National Association of Pension Funds (NAPF).

A further two pension schemes have insured their pensioner liabilities with buyout firms, taking business written in the market to more than £3.5bn since April.

From a financial market perspective, this decade has been notable on many accounts, not least of which has been the prolonged period of low financial market volatility and outperformance of emerging markets.

Scheme trustees who also sit on the employer’s board will breach their legal responsibilities unless they promptly complete paperwork, according to a lawyer.

Retiring employees at age 65 is a legitimate aim of employment policy and the labour market, the advocate general of the European Court has said.

The collapse of some of the world’s largest companies could herald a spate of class actions driven by UK pension funds, lawyers have predicted.

The growing time and expense involved in liability hedging is leading to a fall in its use, according to Watson Wyatt.
The consultancy estimates that pension funds hedged £35bn in 2007, but only £20bn-£25bn this year.

UK pension funds are increasingly investing in global property and taking an opportunistic approach to the asset class.

Falls in Russian equities have factored in an overabundance of negative scenarios, according to Raiffeisen Capital Management.
The fund manager said oil and gas shares are a bargain at current price levels, as are those of several banks.

Analysis: Lawyers are advising trustees to relook at their investment strategy, their risk exposure and their contracts with investment banks in light of recent market scares. Pensions Week spoke to the UK’s top pensions lawyers for their views.

It is over a year since the start of the credit crunch. As those trustees with corporate bond holdings will know only too well, the credit spread – their yield premium over gilts – has widened dramatically over that period as the risk of holding corporate debt was re-evaluated.

[GMPs] were a supportive gesture, but in practice contracting out became a Trojan horse, enabling government to pass cost on to employers. By Deborah Cooper.

Chinese wall

Rules operating within an organisation that prevent confidential information being transferred from one part to another, to protect client confidentiality or to prevent a firm benefiting from a conflict of interest.

Money market funds have continously met investment objectives over the past year, and offer genuine diversification if managed correctly. By Nathan Douglas.

This year’s NAPF engagement survey is largely positive, but there is still work to do, says Tom Powdrill.

Annual Corporate
Governance Seminar
Welcome to hard times
November 4, 2008
NAPF, Westminster

Deficit funding

Some may consider it self-evident that there is no meaningful fiscal policy underpinning pension funding. In 1997 pension fund dividends effectively became subject to tax when the right to a refundable credit was withdrawn by the incoming Labour government.

Traditionally investors have used equities, bonds and cash as the foundations of a balanced investment portfolio. However, since the start of the credit crunch, financial markets have experienced high levels of volatility, credit markets have suffered from a lack of liquidity and investors have been bombarded by bad newsflow.

Emerging market indices have not made good reading for most of this year, but unlike developed world indices the experts are positive about the short-term growth prospects.

Although emerging markets performed poorly in 2008, this is just a short-term problem, says James Phillipps.

Domestic demand is fuelling emerging economies, with smaller companies at the forefront, says Alastair Reynolds.

Background

Scottish Widows Investment Partnership (SWIP) is one of Europe’s largest asset management companies, managing over £90bn* worth of assets. It invests across all the major asset classes for a wide range of clients, including corporate pension funds, local authorities and charities.

MetLife Europe has appointed John Cacchioli (right) as chief administrative officer to replace Chris Reed, who is returning to live in the United States.

Schroders has appointed James Buckley (pic) to the role of head of Asia property multi-manager to expand the business.

Psolve Asset Solutions has appointed Martin Johnson (pic) to the new role of investment director in its risk management solutions business.

Skandia UK has named Peter Mann (pic) as chief development officer to enhance the firm’s services for financial advisers.