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Investment

The Weekly Wrap: July 12 edition

By Lisa Botter | July 12, 2013

A round-up of the pensions industry stories published across the FT Group, from schemes asking fund managers to seed real estate investments to insurers' warnings over defined ambition.

Pension funds press forward on alternative route

FTfm: Pension funds are increasing exposure to alternative assets faster than any other investor, a survey by Towers Watson in association with FTfm has found. Assets held by the top 100 asset managers that deal with schemes increased 8 per cent in 2012, compared with a fall of less than 1 per cent for the top managers that deal with all investors.

Week in numbers 

  • 8 per cent increase in scheme assets held by alternative asset managers
  • 7.5 per cent increase in the average executive director pension contribution
  • 1000 UK Coal pensioners will lose at least 10 per cent of value of pension

Institutional investors demand skin in the game

FTfm: Institutional investors have increasingly demanded fund managers seed real estate investments to strengthen alignment of interests. “The fund model has really broken down for end investors. They want a lot more control than in the past and skin in the game,” said Andy Rothery, head of real estate at Deloitte.

UK executive pension contributions rise

FT: Executive directors’ pension contributions have on average risen 7.5 per cent over the past two years. According to a study by consultancy LCP, the average cost to the UK’s 100 largest quoted companies of providing pensions has risen from £225,000 in 2011 to £242,000.

UK insurers warn of defined ambition cost problems

FT: The Association of British Insurers has warned pensions minister Steve Webb that defined ambition is too costly to deliver satisfactory outcomes and too difficult to regulate. The ABI said: “While such products have the benefit of apparent simplicity to the employee, they also face formidable obstacles.”

UK Coal rescue deal saves 2,000 jobs

FT: UK Coal Operations’ £543m pension liability has been passed on to the Pension Protection Fund as part of a deal to rescue the mining company. About 1,000 pensioners in post-privatisation final salary schemes will lose at least 10 per cent of the value of their pensions.

Most read on pensionsweek.com

How auto-enrolment exceptions help your scheme
Industry to meet ministers over impact of UK split
Sea change needed to bolster contract governance
Essex reduces AE costs with transitional delay
Gilt investment reaches post-crisis peak at £22bn

This week's social media comment

In response to Pensions Week's story on Bedfordshire offering academies representation, KPMG's Steve Simkins tweeted:

 
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