UK roundup: E.on, ITV, Fujitsu, Warwickshire, Bedford, Hertfordshire, Newham
04 Mar 2010
UK – The £5bn (€5.5bn) E.on UK pension scheme has appointed Cardano as its investment adviser, while ITV has reported its pension deficit more than doubled to £436m in the last year.
Elsewhere, members of trade union Unite who work for Fujitsu have accepted proposals to resolve a dispute over pay and pensions, while among local authority pension schemes Warwickshire is seeking a private equity manager, Bedford is tendering for investment consultancy services, Hertfordshire has awarded property management services and Newham has appointed a diversified alternatives manager.
- Trustees of the £5bn E.ON UK pension scheme have appointed Cardano to advise them on all aspects of the Group’s investment arrangements, including asset allocation, liability hedging and manager selection.
Neil Smith, chief executive of the E.on UK Pension Scheme, said, “We chose Cardano because we wanted to adopt a more dynamic and flexible approach to our investment strategy. Recent events have shown how important it is for trustees to focus on the funding position and to manage risks but also to adopt an innovative approach to generating returns.”
- In its end of year results to December 2009, ITV confirmed its pension deficit increased from £178m in 2008 to £436m, despite taking into account savings of £110m related to changes to the DB scheme. It said it also remains in consultation with trustees over plans to use SDN as asset backing to the scheme. (See earlier IPE article: ITV plans to use subsidiary as contingent asset)
ITV claimed the increase in the IAS19 deficit "reflects higher assumed inflation and a lower discount rate, both of which increased expected future liabilities, partly offset by an increase in asset values, deficit funding and benefits estimated at £110m from changes to the DB scheme".
- Unite has confirmed that members working for IT company Fujitsu have accepted pension proposals by a four-to-one majority to end a four-month dispute involving strike action.
Fujitsu had planned to close the final salary scheme to future accrual. So under the new proposals a 5% increase in pay has been offered as compensation for the switch to a defined contribution (DC) scheme. In addition, the firm keep the scheme open for an extra year until March 2011, when the DC scheme becomes contractual for both new and existing members.
- Meanwhile Warwickshire County Council is seeking an investment manager to run a £40-50m private equity portfolio for its £820m pension fund.
The council is seeking a fund-of-funds solution only, and may appoint one or more managers to the role. The closing date for submissions is 29 March 2010 and further information can be obtained from Hymans Robertson.
- Bedford Borough Council is tendering a five-year contract for investment consultancy services to its £887m pension scheme.
It is seeking a provider to deliver investment advice to the pension fund committee when making investment decisions, while meeting local government pension scheme investment regulations. The closing date for submissions is 7 April 2010 and further information can be obtained from Bedford Council.
- Hertfordshire County Council has appointed CB Richard Ellis Investors (CBRE) to provide property investment management services for its £1.64bn pension fund.
The council issued the tender in November 2009 and selected the firm from four applicants, based on a range of criteria including investment approach, portfolio construction and relative performance.
- And finally, the London Borough of Newham has appointed Morgan Stanley Investment Management to run a diversified alternatives portfolio for its £502m pension fund.
The council revealed in March 2009 that it was tendering around 10% of its total portfolio, or £50m of assets, to be invested in diversified alternatives - a variant on diversified growth funds as it focuses solely on alternative investments. (See earlier IPE article: Newham makes first move towards diversified alternatives)
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Author: Nyree Stewart
