UK - Several UK local authorities have reviewed their investment and administration mandates while there have been developments elsewhere in relation to UK pensions regulation.The £3.8bn (€4.3bn) Tyne & Wear Pension Fund is seeking managers to run four equity mandates covering the UK, global, Japanese and Asia Pacific ex Japan sectors.
South Tyneside Council signalled its intention to tender a number of investment management mandates in October as it starts to implement its new investment strategy agreed in February 2008. (See earlier IPE article: UK round-up: Tyne & Wear review, AA Pension Scheme, Staffs)
The pension scheme is seeking two or more active global equity managers to run a portfolio of assets valued at around £750m. It is expected to have a target outperformance of around 2% to 4% per annum, against either the FTSE All World or MSCI All Countries World Index over a rolling 3-5 year period.
South Tyneside is also targeting one or more UK active equity managers for a mandate of £300m with outperformance of 2-4% against the benchmark, while the active Japanese equity manager will be responsible for a portfolio of around £80m. In addition the scheme is offering an active Asia Pacific (ex Japan) equity manager for a mandate of £30m, which will also have a target of outperforming the relevant benchmark by 2-4%.
The closing date for all four searches is 13 January 2010, and further information can be obtained from Hymans Robertson.
The council confirmed in May that it was seeking one or more managers to run a £74m global equity mandate, following a review of its strategic asset allocation and the decision to reduce its UK equity allocation. (See earlier IPE article: Shropshire reduces UK equities for new global mandate)
Kent County Council is further diversifying its pension fund with the £2.2bn scheme tendering a £40-50m global infrastructure mandate. It is also seeking one or more managers for a private equity mandate valued at £40-50m.
The pension fund currently employs DTZ to run UK and European property portfolios, valued at £150m and £30m, respectively at the end of June, while it also has small investments in private equity and PFI.
However, it is now seeking an infrastructure manager, and confirmed it will consider both direct infrastructure and fund-of-fund approaches, with the mandate possibly being split between managers. The council meanwhile noted it would only consider managers offering a fund-of-funds solution for the private equity mandate.
The closing date for both tenders is 29 January 2010 and further information can be obtained from Hymans Robertson.
Under the terms of the contract, Xafinity Claybrook - under the name Claybrook Computing - will be required to support the PenServer software, including PenCalc, which was developed specifically for the civil service pension schemes, in addition to providing data conversion and interface software.Elsewhere, the Financial Services Authority (FSA) has proposed in the latest consultation on the Retail Distribution Review (RDR) the introduction of "consultancy charging in the corporate pensions market to take effect at the end of 2012".
This means all firms "that assist employers with the setting up or administration of GPPs must agree their own charges with the employer in question, rather than being paid by commission set by the pension provider. This proposal will bring to an end the current commission-based system of adviser and employee benefit consultant remuneration in the GPP market".
These proposals would also relate to the establishment of group stakeholder and group self-invested personal pension (SIPP) schemes. The FSA noted the 'consultancy charging' would apply "regardless of whether the end investor (the employee) receives advice, as we are focusing on the service to the employer."
The ban on commission will also be extended to prevent product providers from paying commission to advisers on investment products that are linked to occupational pension schemes but sold as alternatives to GPPs.
Responses to the consultation should be submitted by 16 March 2010.
The findings also revealed a similar number believed guidance should be issued on default funds in trust-based schemes, not just GPPs. Meanwhile, 84% felt reviews of these funds should be conducted at regular intervals. PMI members also highlighted additional triggers for a review including changes to the charging structure (74%) and changes to the strength rating of the insurance company (55%).
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