UK - The pensions industry in the has called for stability around government pensions policy in the wake of indecisive UK election results and the unexpected departure of the Conservatives' shadow pension minister, Nigel Waterson. Meanwhile Croydon is seeking actuarial and investment consultants, John Lewis has appointed a legal adviser, and Freshfields is closing its defined benefit (DB) scheme to future accrual.

No single political party has won an overall majority in the UK general election (despite some results still outstanding), leading to a hung Parliament in which no party enjoys an overall majority. The Conservative party received the most votes and the most seats in the House of Commons, but it has lost its long-term shadow pensions minister Nigel Waterson. 

Waterson, who has held his seat in Eastbourne for the Conservatives for 18 years, was beaten in the election by Liberal Democrat candidate Stephen Lloyd, who scored a 47.3% share of the vote against Waterson's 40.7%.

If the Conservatives do manage to form a minority government, it is unclear how pension policy will unfold as Waterson had advocated for earlier auto-enrolment and a review of the National Employment Savings Trust (NEST) system, an incoming scheme already set in motion by the outgoing Labour government.

Robin Simmons, partner at the law firm Sacker & Partners, said: "Pensions are truly the elephant in the room. We need a government that recognises the long-term nature of the pensions game and its predictable impact both socially and economically. A good start would be to stop the musical chairs around the role of pensions minister - the necessary tough decisions won't be taken by ministers hot-desking in this critical role."

Ros Altmann, an independent pensions consultant, said: "Until we have a stronger government formed, it seems that radical pension reform is unlikely."

Altmann said if the Conservatives and third-placed Liberal Democrats jonied together they could "set up some inquiry or review into pension issues, state pension age, tax relief for pensions and so on, which would be just the beginning of a long road."

She added: "Nigel Waterson is a big loss to Parliament - he was one of the very small number of MPs who did actually understand and have some experience of our pensions legislation and pension complexity."

The London Borough of Croydon is seeking an actuarial and benefits consultant and an investment consultant on behalf of its £550m (€638m) local government pension scheme.

It is offering framework agreements for the two roles, which will be available to Croydon, Sutton and Harrow councils, as well as "any other local authority in various locations throughout the UK that wish to utilise the agreements through out the duration of the contract term".

Responsibilities of the actuarial role will include the completion of triennial valuations and the provision of advice on employer contribution rates and operational issues relation to the scheme.

The investment adviser would be expected to provide "strategic services and advice with respect to the asset mix and other components of a successful pension strategy". It will also be required to maintain a database of "major players" in the institutional pensions investment space and provide advice on performance and risk.

The actuarial framework agreement is for an initial period of six years, while the investment advice framework agreement is expected to be in place for at least four years. Further information can be obtained from Croydon Council.

The £2bn (€2.3bn) John Lewis Partnership Trust has appointed Eversheds to provide the pension with legal advice.

Dinesh Visavadia, head of pensions at John Lewis, said: "The Eversheds team really won through its diversity and a refreshing approach. It's vital that our advisers are not only closely aligned to the partnership's values and to the issues affecting pension schemes themselves, but also that they are well supported by a team with commercial strength."

This is the latest appointment by the John Lewis pension fund after it appointed JP Morgan for custody services last month. (See earlier IPE article: UK roundup: F&C, JP Morgan custody, GKN, DB closures)

Law firm Freshfields has proposed closing its DB scheme to future accrual from 1 July 2010 and moving employees to its group personal pension plan (GPP) in an effort to address an increasing scheme deficit.

The last valuation in 2009 reported a deficit in the scheme of around £32m, and even with recent gains in financial markets it is estimated to still reach £22m. This is despite a deficit repayment programme of £11.6m over the three years to 2009 and a rise in retirement age from 62 to 65.

A spokeswoman for the firm said: "Reluctantly we are proposing the cessation of further accruals in our final salary pension scheme. Despite our best efforts to keep the scheme viable, the scale and volatility of the funding deficit; the escalating costs of running the scheme; and the increasing inequity with the majority of employees who are not members have brought us to the conclusion that in the interest of the whole firm this is the right proposal to put forward."

The move will affect around 260 employees, although pension benefits accrued before July will not be affected. If the DB scheme does close, members moving to the GPP would receive age-related matching employer contributions and an initial one-off contribution equal to 10% of basic salary - subject to a scheme earnings cap.

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