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Volkswagen UK reviewing DB investment strategy

UK – Volkswagen Group UK Ltd. says it is revamping the investment strategy of its 123.8 million-pound (176 million-euro) defined benefit pension scheme.

“At the moment we’re reviewing the investment strategy for our DB scheme,” Roy Platten said. “We’re right in the middle of reviewing that strategy.” The scheme is being advised by actuarial consultants Hymans Robertson.

According to ‘Pension Funds and their Advisers 2004’ the assets are managed by Deutsche Asset Management and Schroder Investment Management.

The scheme was closed to new members in 1997 when a new money purchase scheme, now worth 19.6 million pounds, was launched. The money purchase plan was boosted in 2003 when it took on around 1,000 workers from new VW subsidiary Bentley. VW UK was a separate company until it was bought by Germany’s VW AG in 1993.

Speaking at a seminar organised by Hymans, Platten said the company offers four different investment vehicles for the money purchase scheme, to allow investment choice.

Commenting on the declining share of the state pension of average earnings, Platten added: “It’s putting a lot of pressure on workplace pensions.”

Hymans’ senior partner Ronnie Bowie told the seminar that he thought people had stopped being “transfixed” by the DB problem. “Perhaps the pendulum is shifting back,” he said.

His colleague Charles Young saw scheme specific funding leading to a more balanced distribution of responsibilities, between the company and the scheme.

The seminar was one of a series that Bowie said was oversubscribed. It featured a light-hearted spoof of 1960’s sci-fi show ‘Star Trek’ – where the crew of the Starship Enterprise are on a mission to avoid pension black holes.

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