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The Weekly Wrap: May 30 edition

By Daniel Scanlon | May 30, 2014

A round-up of pensions and investment stories published across the FT Group – from a shareholder backlash at Urban Outfitters, to Labour plans to bring the low-paid into auto-enrolment.

Urban Outfitters faces shareholder rebellion over diversity

FT: Urban Outfitters has attracted criticism from its pension fund investors over a lack of diversity at board level. Five of the largest public pension plans in the US backed a shareholder resolution at the clothing company’s annual meeting, demanding that the board reflect “the diversity that exists within its target markets”.

The week in numbers 

  • Academics and administrators could face an effective pay cut of 10% if the USS scraps final salary
  • 1.5m more people could be auto-enrolled under Labour plans to extend AE
  • Analysis has found 15% of US equity funds could be 'closet indexers'

Aviva chief warns on pensions insurance returns

FT: A decline in profit margins on bulk annuities is “inevitable” because of mounting competition, according to Aviva chief executive Mark Wilson. His comments stand in contrast to those in the industry who have expressed hope that sizeable pension derisking deals will help compensate for an expected downturn in the annuities market.

UK academics face 10% pay cut over pension reform

FTfm: Academics and senior university administrators could face an effective pay cut of 10 per cent if the sponsor of the Universities Superannuation Scheme goes ahead with proposals to scrap final salary benefits, according to pensions commentator John Ralfe. The USS’s deficit is believed to have risen to around £13bn from £2.9bn in 2011.

‘Closet indexers’ face legal action from investors

FTfm: Investors in the US and Europe are considering legal action against fund groups that have sold expensive active funds that do little more than track market performance. Of the 1,147 US equity funds analysed by consultancy Fideres, 15 per cent were ‘closet indexers’ and could be liable to pay billions of dollars in damages.

Labour aims to draw 1.5m low-paid people into workplace pensions

FT: Labour has unveiled proposals to reduce the threshold for auto-enrolment eligibility to £5,772, down from £10,000. Some in the industry have questioned the benefit of the proposals, with a worker earning £6,000 a year expected to gain only £10 a year in pension contributions.

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