UK - Friends Provident, the UK pensions and insurance firm, is targeting trustees of defined benefit (DB) and large contract-based defined contribution (DC) occupational schemes with a new investment administration platform.
The corporate investment platform aims to provide a link between trustees or third-party administrators of a pension scheme and the fund managers, according to Friends Provident, to improve the flexibility of the scheme by moving money more easily between fund managers on the platform, and to provide access to blended funds.
Martin Palmer, head of corporate pensions marketing at Friends Provident, said: "At the moment, a trustee with a DB scheme, with say £50m, might spread that between five different funds. But if they invest it in a platform, they can get access to blended funds, and often get better terms. One of the big issues trustees have is from market risk and transition costs when switching funds. But because they're investing in an underlying fund, it smoothes that transition and makes the process quicker," he argued.
The platform would receive instructions from TPAs for larger DC schemes on decisions made by individual members, while the trustees of small DB schemes would decide where to invest the money and the platform would then implement those investments.
That said, the flexibility and speed of transferring money between managers may still be dictated by tender processes in schemes such as the LGPS where contracts over a certain value have to be issued via the European tender database.
Friends Provident is offering access to a select range of funds to begin with, although Palmer confirmed new funds required by trustees could be added within five to six days, if there is already a legal agreement in place with the manager.
The platform is its first step towards the launch of a corporate platform which is scheduled to be launched by the end of September 2010, and which will be focused on overall employee benefits to deliver employers and individual members with contract-based pension schemes.
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