UK roundup: State Street, MP pensions, Fujitsu, Linklaters, Aero Engine
UK - Preliminary figures from State Street's defined benefit (DB) scheme results survey show an average 15% return, while the MP's pension scheme has appointed a legal adviser. Workers at Fujitsu are organising further strikes over the firm's pension scheme closure, while Linklaters is to close its DB scheme to future accrual and Aero Engines Control has appointed a pension fund adviser.State Street Corporation says initial estimates from the WM UK DB Pension Fund Universe are that the average pension fund is looking at a return of 15% for 2009. This is just slightly ahead of the BNY Mellon data issued earlier this week that reported a 14% return. (See earlier IPE article: UK pension funds predicted to return 14% in 2009)
The State Street data showed UK equities, which are strategically the largest component of the majority of funds, returned 30% for the year, but international equities had mixed results. The Pacific region (excluding Japan) and emerging markets returned 50% and 55% over the year, with Continental Europe returning 19%. However Japan returned -6%.
State Street also revealed that while pension funds generally disinvested from equities over the year, the equity weight increased due to the relative strength of markets. In addition, money was withdrawn from bonds and invested primarily in alternative asset classes with private equity and hedge funds the main recipients.
Jeanette Patrizio, vice president of State Street Investment Analytics, said: "In isolation, it was a stellar year for risk assets, both equity and corporate bonds, while the safe havens of cash and government bonds languished. However, the returns represent only a partial recovery of the significant investment losses that were rooted in the collapse of the credit market and the sharp economic recession it precipitated."
Jimmy Walker, head of pensions at the House of Commons, said: "The PCPF is a unique scheme and the trustees felt that a specialist law firm, such as Sackers, who were appointed following a rigorous selection process, would have the skills required to help them meet their objectives."Unite the Union has confirmed five dates for further strike action by workers at Fujitsu over pay and pension plans including the closure of the DB scheme to future accrual.
Union members at Fujitsu voted in favour of strike action by 75% in November, with today and four other dates this month earmarked for action.
Peter Skyte, Unite national officer, said: "Other IT companies are dealing with similar issues in a much more constructive way and the approach taken by Fujitsu to date treats its highly skilled workforce as a disposable commodity rather than its most important asset."
The scheme had closed to new members in 1996, and the remaining existing members have been enrolled into the existing group personal pension scheme with their DB entitlements are preserved.Meanwhile Aero Engines Control, a joint venture between Rolls Royce and Goodrich, has appointed Mercer to provide its DB pension scheme - which has around 1,000 members - with actuarial, investment consulting and administration services.
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