UK – Paul Myners’ recommendations on institutional investment are being adopted by the majority of UK pension schemes, reveals a survey by the National Association of Pension Funds (NAPF).
A survey of 100 NAPF member schemes revealed that 40% of respondents were already following good investment practice in line with the principles outlined in the Myners’ report of 2001. A further 36% had subsequently taken steps to comply.
The 17% which do not yet comply were taking action to do so.
Former Gartmore chairman Myners was given a remit by the UK government in 2000 to investigate the way in which investment decisions are made within the UK institutional investment industry. He was also asked to identify factors that might be distorting the decision making process to the detriment of both pension funds, and those parties that could benefit from investment by pension funds.
The ten principles outlined in Paul Myners’ commissioned report are:
1. Effective decision-making
2. Clear objectives
3. Focus on asset allocation
4. Expert Advice
5. Explicit mandates
7. Appropriate benchmarks
8. Performance measurement
10. Regular reporting
More than 76% of those surveyed thought the recommendations as a whole would improve investment decision-making. Ninety-seven percent of the schemes said they had considered the principles, or were currently doing so. The remaining 3% intended to do so.
With regards to transparency, and regular reporting, 91% of respondents said that kept their members regularly up to date on their fund’s performance, and 81% said they kept members regularly informed on their fund’s asset allocation.
Commented NAPF chief executive Christine Farnish: “Whilst there remain a few area where further work clearly needs to be done, the progress made should reassure ministers that the principles are being taken seriously, I hope the government will take note of these findings when forming its own view as to whether legislation is still required.”