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IPE special report May 2018

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Ireland’s CFOPS outlines shift to specialists

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IRELAND – The administrator of the €540m Construction Federation Operatives Pension Scheme has outlined the scheme’s move from balanced managers to specialists.

“The trustees, in recent months, have restructured the management of the scheme’s funds, moving from a balanced mandate with two fund managers, to specialist mandates with three fund managers,” said administrator Pat Ferguson.

Writing in a magazine article, Ferguson said the assets are 55% in equities, 15% in property and 30% in fixed income.

Fixed income is managed by Credit Agricole Asset Management while equities are split between Bank of Ireland Investment Managers and Irish Life Investment Managers.

Real estate is jointly managed by Jones Lang LaSalle (office and industrial) and CB Richard Ellis Gunne (retail).

“The scheme has always held a higher than normal percentage of its fund in property,” Ferguson said. “This has served it well over the years. Traditionally, the scheme’s holdings were in office accommodation, however, the last five years has seen it shed some of these holdings in favour of high street retail units.”

The scheme has an active membership of 63,500 employed by 7,100 contributing employers.

Ferguson added that the average annual performance over the three years to the end of 2004 was 1.5%. The five-year return was 2.5% and the 10-year average is 12%. “Over the last 40 years the annual average performance was 14.1%.”

Ferguson explained that the basic format of the scheme was relatively unchanged until a review in 1999, which recommended a shift into a hybrid. Under the new arrangement, each member contributes to their own direct contribution type personal fund with pensions being provided in-house by the scheme from its own annuity fund.

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