UK - A new survey has found that pension funds are not happy about investment consultants providing asset management services.

"An unequivocal 71% of all respondents feel that investment consultant firms should not also provide asset management services (e.g. a Manager of Managers) as part of the same corporate structure," said the Pension Fund Partnership.

"Although, interestingly, there appears to be somewhat less concern about custody and investment management being part of the same firm."

And 20% of respondents said they had no problem with consultancy firms providing asset management services.

The findings came in the partnership's fifth annual survey of occupational pension schemes. They follow a recent report from KPMG which identified "tension" between managers and consultants.

The Pension Fund Partnership also found that even more defined benefit schemes have closed. "Almost one third of defined benefit respondents have closed their DB schemes to new members (just 14% had done so in our 2001 study).

"The findings show that further closures can be expected," it added.

The average funding position under the Minimum funding Requirement is 105.3%, "down on the figures of 108.7% in 2002 and 111.2% in 2001".

"This year, one quarter of respondents have an MFR funding level of below 100%, although for Local Government Pension Scheme respondents over half have an equivalent funding position of less than 100%.

It also found that around 40% of segregated schemes have not made any changes to their asset allocation over the last year. But 43% of respondents said they have shifted towards bonds from equities.

Fifty-five percent of those polled said they had made changes to some aspect of their scheme or arrangements as a direct result of the Myners Report.

Thirty-seven percent of respondents said the main challenge facing occupational pension schemes is poor investment returns. Rising costs, poor perception, FRS17 and investment uncertainty were also seen as worrying. Increased longevity was cited by just 10% of respondents.

The survey polled 242 schemes, representing a combined asset value of over 111 billion pounds and more than 3.1 million members.