BAA seeks actuarial advice
UK - BAA Airports Limited is seeking an actuarial consultant to provide advice to both its defined benefit (DB) and defined contribution (DC) schemes.
The three-year contract includes the provision of core services such as corporate pensions accounting, DB governance, funding negotiations and risk monitoring, as well as project work such as investment strategy negotiations and merger & acquisition activity, including pension issues relating to the potential sale of airports.
Actuarial services are currently provided to the BAA pension scheme by Mercer, which also acts as the scheme's investment consultant.
BAA confirmed in July that a significant increase in its pension deficit had contributed to its £575m (€630.6m) first half loss, as the actuarial valuation to 30 June 2009 had revealed a £249.8m deficit. (See earlier IPE article: Pensions deficit adds to BAA loss)
This is in comparison to figures from the latest annual report for 2008, which reported a surplus of £95m in the BAA scheme, and a £20m liability relating to other pension schemes within the group. The assets of the scheme at 31 December 2008 stood at £2.08bn.
Elsewhere, the London Borough of Ealing has issued a Prior Information Notice (PIN) highlighting the contract for pensions administration will shortly be coming up for renewal.
It is expected the contract, currently operated by Liberata, will be awarded for a period of 10 years, with a value of £450,000 a year, and the successful firm will be required to provide pension administration and pension payroll services in relation to the local government scheme.
Latest figures from Ealing Council showed the pension fund was valued at £467.1m at the end of June 2009, up from £437.5m at the end of the first quarter. The latest estimate of the funding level showed the position had improved slightly from the 43% at the end of March to 48%. However this is still almost half the 73% funding position at the last triennial valuation in 2007.
Ealing employs three external investment managers to run the pension scheme, with Lazards responsible for UK equity, RCM for global equity and Royal London Asset Management for UK corporate bonds. This structure produced an overall return of 7.1% in the second quarter, although this was still 1.9% below the benchmark return of 9%.
The closing date for applications for the BAA actuarial contract is 9 October 2009, and further information can be obtained from website www.airportsmart.com
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