Default funds are turning away from traditional lifestyle funds towards multiple asset class diversification, according to PensionDCisions.

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 herald the opportunities out there.

Defined benefit (DB) schemes showed a £19bn 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 summer, September witnessed a surge in funding profits.

“Huge opportunities” for bargains in credit markets have opened up for pension funds in recent weeks, according to implemented consultants and fund managers.

Bank staff rallied against MPs’ pensions benefiting from short-selling at the Conservative party conference last week.

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 another amendment will oblige the government to disclose the amount of public subsidy used to implement them.

The BP Pension Fund has formed a £100m UK investment fund to take advantage of depressed property prices.
BP’s Ropemaker Properties will have a fund worth an initial £50m of equity, 80% of which will be provided by BP, and the remainder by third-party investors.
The BP fund has more than £14bn of assets under management.

Buyout market capacity must grow by about £250bn over the next three years to meet demand from trustees, according to research from Pension Insurance Corporation.

The long cohort is overestimating improvements in mortality, according to early indications from Hymans Robertson’s Club Vita project.

Vulnerable companies should be exempted from paying the Pension Protection Fund (PPF) levy in an economic downturn, according to the Occupational Pensions Trusts (OPT).

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.

Trustees must not blindly diversify their cash investments in a knee-jerk reaction to the collapse of UK banks, urged Scottish Life.

Clarification

Nick Flint set up an office in Budapest for Hewitt Associates, not for Hymans Robertson
(PW 22/09/08).

Watson Wyatt has tempted 30 clients into its Advanced Investment Solutions (AIS) consultancy service.

Pension schemes owned by private equity firms are less likely to fall into the Pension Protection Fund (PPF), according to Close Brothers.

Fund managers have supported the Pensions Regulator’s guide to conflicts of interest.

Leading fund managers have expressed their support for the US government’s $700bn (£397bn) support package for its ability to stabilise equity prices.

The earnings potential on many UK equities makes the risk of buying them in current conditions worthwhile, believe fund managers.

Leverage and exotic financial instruments will fade and with them the bumper profits of financial services companies, believes a leading fund manager.

PROFILE: Lord David Hunt is a former MP, a practicing solicitor at Beachcroft, ex-president of the Chartered Institute of Insurers and a Conservative peer in the House of Lords. He has a big role to play in the passage of the new pensions bill, and here he talks to Charlie Kirby.

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’ reached the common consciousness. Things took a significant turn for the worse with the Northern Rock run in September 2007. Since then, we have all been living in a nervous state.

Delegated consulting is well positioned to play a significant role in repairing the damaged balance sheets of many UK pension schemes. By Chetan Gosh.

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.

The past fortnight’s events mean pension schemes cannot afford to overlook any risk management strategies, including the use of derivatives. By Martin Johnson.

Tom Powdrill considers the ramifications of privileging the financial sector with bail-out proposals.

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.

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 South Africa, wearing a rubber and foam rhino suit for much of that distance. Needless to say, it is a question he has already asked himself and, as he admits, one that nagged him throughout the whole run.

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 alternative investments, we’ll look in more detail at the current trends among investors and ask whether alternatives are now entering mainstream.

BNY Mellon Asset Management has snapped up Simon Putt (pic) as director and head of UK institutional client relationship management to boost its client relationship team.

Aon Consulting has promoted two members of its management team to senior positions.

Chris Simmons (pic) has been appointed national operations manager in the benefits solutions division, while Andrew Leslie becomes head of operations in London.

Charity the Pensions Archive Trust has named Susan Gentles (pic) as an archivist.

Her main role will be to help the trust promote the study of the history of occupational and personal pensions provision in the UK.

Rowanmoor Pensions has made a flurry of appointments to boost the development of its sales and consultancy divisions.

Tim Beck has been promoted to national sales director and Neil Merryweather (pic) becomes director of consultancy.