UK roundup: PPF, North Yorkshire, Strathclyde, ONS
UK - The Pension Protection Fund (PPF) is seeking liability-driven investment managers for its portfolio, while North Yorkshire County Council and Strathclyde pension fund have both appointed investment advisers.
Meanwhile, equalising state retirement ages for men and women will cause the latter's life expectancy in retirement to fall to just under 23 years, according to data from the Office of National Statistics (ONS).The (PPF) has initiated a tender for a number of fund managers to establish a framework agreement for a liability-driven investment mandate.
The PPF, which has assets of around £4bn, earlier this week confirmed the appointment of six global tactical asset allocation (GTAA) managers as part of its revised investment strategy and its move into alternatives, outlined in its new statement of investment principles in March. (See earlier IPE article: UK PPF's diversification plan continues with GTAA hires)
It has now issued a tender notice for a maximum of five fund managers to participate in a four-year framework agreement for LDI strategies, with the option of two possible two-year extensions to a maximum of eight years.
In the tender notice, the PPF said the board was seeking managers for liability-driven investment for the hedging of interest rate and inflation risk of pension liabilities.
It added: "Providers may also be expected to undertake directed derivatives trades across a broad range of derivative contracts."
The closing date for tender submissions is 23 July.
Carolan Dobson of Investment Trustee & Adviser Services has taken PJ Williams' place after the contract with Allenbridge EPIC was put out to tender late last year.
Dobson was awarded the four-year contract, which can be extended a further two years.
North Yorkshire also selected Hewitt Associates as the fund's investment consultancy, replacing Mercer.
The council has yet to award a £120m (€133m) actively managed bond portfolio.
The contract, set to run for six years, was put out to tender in April. (See earlier IPE story: North Yorks, Aggregate Industries, Woolworths, CN Group)
The North Yorkshire Pension Fund (NYPF) witnessed a large drop in assets between 2007-08 and 2008-09, down from £1.2bn to only £828m as of the end of March last year.
In its annual report, the NYPF called the development "very disappointing", but attributed the losses to turbulent financial markets.
Of a dozen fund managers, only two saw positive growth over the 12 months, with currency hedging performing particularly badly and resulting in a 183% negative return.
The pension fund had been seeking a provider to assist it in setting its investment strategy and investment management structure, along with manager selection, monitoring and retention and the termination of contracts. (See earlier IPE article: Strathclyde to appoint manager selector)
Following the appointment of Hymans Robertson, reported by IPE in February, Strathclyde confirmed last week the consultant had helped the fund to rebalance its portfolio and adopt a more macroeconomic, top-down view of its investment portfolio. (See earlier IPE articles: UK roundup: Shetland, Strathclyde, TPR, Thomson Reuters, Amey and Strathclyde pension scheme to adopt top-down strategy)
In the updated chapter in its Pension Trends series on life expectancy and healthy ageing, the ONS noted women in the UK could currently expect to live, and therefore draw a pension, for seven years longer than men.
However, it warned that as women's state pension age began to equalise with men to rise from 60 to 65 by April 2020, their life expectancy would decline and the advantage over men would reduce to less than three years.
The data showed men and women have seen their life expectancy increase steadily since 1981, with women in 2009 now expected to live up to 25 years past retirement against 21 years in 1981, while men have a life expectancy of 18 years compared with just 13 almost 20 years ago.
However, the equalisation is expected to reduce women's life expectancy to less than 23 years.