More UK local authority pension funds are reassessing benchmarks and consultancy services as well as looking to equities for better returns as a result of best value reviews.
According to Valerie Burdett-Callen of specialist consultants, Sector Treasury Services, investment managers have also lost some of their input as a result of asset/liability modelling (ALM).
“Years ago it would be investment managers that would be involved in looking at longer term asset allocation before benchmarks were up and running. But the actuarial profession has stolen the march on the investment managers by developing ALM studies”, she said.
“Liability studies are very useful in educating trustees about risk, but they don’t tell you how you should monitor the performance for your assets,” she said.
Currently, up to 10 local authorities are conducting best value reviews of their financial services - including some London borough councils - according to Burdett-Callen. She anticipates more pension funds conducting best value reviews in investment management in the next couple of years.
“[ALM studies] tend to be bullish on bonds and although in the last couple of years that might have been a very good strategy, in the longer term its not been. I think that pension funds are more convinced that equities are going to deliver the longer term superior return. “
All UK local authority funds will have to show compliance with the best value regime by 2005.
By Madhu Kalia
Ex-BHS owner Dominic Chappell has been ordered to pay a total of £87,000 in fines and court costs after he was found guilty of failing to provide The Pensions Regulator (TPR) with information.
The Department for Work and Pensions (DWP) has said it while believes in the benefits of consolidating defined benefit (DB) schemes, there are significant issues to overcome.
There is just one week left to register to enter the Workplace Savings and Benefits Awards 2018.
Nearly a third (32%) of employers believe new technologies, such as augmented and virtual reality, will play a part in benefits communications, latest research from Aon Employee Benefits reveals.