UK - The London Borough of Camden's pension fund has appointed two real estate managers for a mandate worth as much as £70m.

The contracts were awarded to CB Richard Ellis Investors and Partners Group.

The tender notice outlines that the mandate could be either a single-manager pooled UK property fund or a segregated or pooled property fund-of-funds for UK or global real estate.

However, the local government pension scheme did say it would be willing to split its investment, for which it earmarked between £35m and £70m, between two distinct investment approaches and managers.

Meanwhile, public sector pensions are expected to rise by over 3% next year, after the Office of National Statistics unveiled inflation data for the previous 12 months until September.

The benefits increase, which occurs every April, will be the first time the consumer price index (CPI) has been applied, rather than the previous measure, the retail price index (RPI).

As a result, while pensions will rise by 3.1%, applying RPI, the increase would have resulted in a 4.6% increase in value.

John Ball, head of UK pensions at Towers Watson, said: "CPI inflation is usually lower than RPI inflation, so the gap between the pension they would have received and the pension they will now receive should get wider over time."

Ball added that the annual difference would reach about £900 a year by 2016 if predictions by the Treasury proved correct.

Theoretically, the switch to CPI should also apply to occupational pensions. However, as some scheme rules specify the use of RPI for any benefit increases, this will be difficult to implement.

The consultancy estimated that 85% of its occupational pension clients explicitly used RPI in their scheme rules, meaning the only way these changes could be implemented would be for the government to allow retrospective changes to scheme guidelines.

However, Ball noted that trustees were still in the dark about the exact wording of the legislation, three months after the announcement was made.

"[The government] has not said employers will be allowed to override scheme rules without trustees' consent, nor ruled this out," he said.

Finally, the Pension Protection Fund (PPF) has said the schemes covered by its PPF 7800 index have seen their combined deficits fall to £20.4bn at the end of September.

The figure is a marked decrease from only August, when the funding shortfall was still £53.3bn.

Overall, the funding ratio for schemes covered by the PPF has risen by 3.3 percentage points to 97.9%, with total assets in excess of £961bn.

Additionally, September's funding ratio showed a noticeable improvement over this time last year, when it stood at just below 90%, despite still using RPI as the measure for indexation.