UK - Buckinghamshire County Council has issued a formal tender for an investment consultant for its pension fund, the London Borough of Barnet has agreed a new investment strategy and UK pensioners living in certain countries have lost a battle to have their state pension up-rated.IPE revealed in February that Buckinghamshire County Council was one of two local authorities reviewing investment consultancy contracts with Mercer, as part of the 'best value' regulations. (See earlier IPE article: Two UK authorities review Mercer contract)
Buckinghamshire is therefore re-tendering for investment consultancy services to its £1.3bn (€1.45bn) pension fund, which will include responsibilities such as fund manager monitoring, advice on general investment policy, advice on corporate governance and a strategic investment review.
The contract is for an initial period of three years starting in July 2010, with the option of two further extensions to a maximum contract of nine years.
The closing date for submissions is 27 April 2010, and further information can be obtained from the council's procurement department.
Following a report from its investment advisers JLT, the committee resolved to move the allocation of the fund from its existing 'balanced' mandate - through a majority allocation to funds run by Schroders and Newton - to a 70% diversified growth portfolio and a 30% corporate bonds allocation.
The review of the investment strategy was commissioned in July 2009 in response to analysis suggesting the fund's current asset allocation was "sub-optimal with respect to risk-adjusted return".
In its report, JLT - formerly HSBC Actuaries & Consultants - said the implementation would depend on whether the council would be required to conduct a full open tender, which could take several months, or whether they could simply alter the existing mandates with the current fund managers.
The report noted the preferred option would be to amend the existing Investment Management Agreements (IMAs) with Newton and Schroders. To allow them to maintain the current value of their portfolios, the council could either rebalance the existing multi-asset brief so each manager's portfolio has a 70:30 split between growth and bonds, or it could place the 30% bond mandate with Schroders and allocate the diversified growth assets between the two managers but with a larger proportion to Newton.
Although the investment committee has now agreed the new strategy, it has commissioned JLT to meet with the fund managers and report back at the next meeting on the best way of implementing the changes.
Thirteen UK pensioners who retired to South Africa, Australia and Canada brought the case on the grounds that the UK government's refusal to index-link their pensions - which are frozen at the level set on the date they left the UK - was considered discrimination, as they had paid full National Insurance contributions but did not receive the same benefits as other pensioners.
However, ECHR ruled by a majority of 11 judges to six that the UK's policy was not discriminatory because the "complex and interlocking system of the benefits and taxation systems made it impossible to isolate the payment of NI contributions as a sufficient ground for equating the position of pensioners who received up-rating and those, like the applicants, who did not".
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