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UK roundup: Northern Ireland, Edinburgh Partners, Sackers, Towers Watson, TPR

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  • UK roundup: Northern Ireland, Edinburgh Partners, Sackers, Towers Watson, TPR

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UK - The Northern Ireland Local Government Officers' Superannuation Committee (NILGOSC), which administers the country's local government pension scheme, has awarded a global equity mandate to Edinburgh Partners.

The tender, first put out in January, was for an active, unconstrained, global equity mandate worth 6% of the pension fund's value, approximately £180m (€206m).

NILGOSC told IPE the reason for the mandate to shift from passive to active investment and confirmed Edinburgh would now be in charge of £200m, following strong returns since the original tender notice.

In the year to March, the fund saw growth of 30.5%. Assets under management now total £3.6bn, with close to half being invested in managed or unitised funds and a further 37.8% allocated to equities.

Of the remaining 13.4%, close to 6% was invested in UK real estate, with 4.1% invested in index-linked securities, a further 3.1% in fixed interest securities and the remaining 0.5% allocated to other investments.

According to its most recent annual report, seven fund managers Baillie Gifford and Jupiter Asset Management were employed by NILGOSC, with Legal & General being in charge of the lion's share of assets, managing 47% in a passive fund.

Meanwhile, law firm Sackers & Partners responded to yesterday's publication of the review into automatic enrolment.

While associate Georgina Beechinor said the findings, which will see the earnings threshold increased in-line with income tax, were good news for millions of individuals, she was more cautious about the impact on small employers.

"With no exemption for micro employers, the government must seriously consider how it will provide much needed back-up," she said.

"Supporting small employers should be a priority so they can tackle their new obligations with confidence in the next stage of the pension savings challenge."

Consultancy Towers Watson added that it was concerned the rising cost of employing staff for companies would eventually lead to a levelling down of pension benefits.

David Bird, a senior consultant at the firm, said: "Wages might be held down, or employers could spread the jam of their current pension spending more thinly."

Bird said employees who were happy to opt out from the start would not be allowed to do so until they had been enrolled into the scheme in question.

"This seems a bit like cracking a nut with a sledgehammer when all that's needed to harness the power of inertia is to insist that employees not wanting to save must opt out," he said. "It is over the top to enrol them before they get their say."

He also criticised the repayment of the set-up loan for the National Employment Savings Trust (NEST), saying that engaging people in saving would be harder if they needed to be told that £2 of every £100 saved would "immediately be siphoned away in charges".

In other news, the Pensions Regulator (TPR) is reporting a 15% drop in the number of defined contribution (DC) schemes between 2009 and 2010.

As part of a survey conducted by the regulator, it found there had been a drop from 55,000 schemes to 48,000 schemes over the course of a year.

Additionally, its survey found that three-quarters of the £2.2bn in contributions made over the timeframe were made by employers.

TPR also said the majority of schemes that began winding up between 2005 and 2008 had now done so successfully, with only 16% of these schemes still in existence.

More than 90% of DC schemes had fewer than 12 members, accounting for only 5% of all people enrolled, while only four out of 10 trust-based DC scheme members were still active.

The regulator's acting chief executive Bill Galvin pointed out that the 130 largest schemes had contained around half of all members.

"Large schemes have potential to deliver good outcomes for members," he added. "They have the resources to offer high standards of governance and administration and low costs."

The report also found that less than 18% of all defined benefit schemes were still open, by far the worst figure of the five types of schemes examined.

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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