IRELAND - Active management is unfairly maligned because of ballooning deficits, fearful trustees and the perceived risk reduction benefits of indexation, the Irish Association of Pensions Funds (IAPF) annual investment conference heard today.
William Killeen, associate director of equity management at Bank of Ireland Asset Management, advised delegates that successful active management could contribute to lower fund risk and produce superior returns in the long term.
According to Killeen, the key to superior returns is to take active stock positions in concentrated portfolios.
The current short-term focus being adopted by funds, while understandable, should not mask the return and investment risk benefits available from active managers with strong long term track records and proven investment philosophies, he said.
Michael Moloney, european director of investment strategy at Mercer Investment Consulting warned improved longevity and an environment of relatively low interest rates posed a major challenge to those responsible for pension funds to minimise further downside risk while trying to keep costs within manageable levels.
Many responsible for funds feel like they are running desperately up the sand dune of the minimum funding standard,” he commented.
Moloney added that new investment approaches, including liability driven investment solutions, needed to be developed to help fund trustees and sponsors “solve this unenviable dilemma”.
In related news, Seamus Brennan, minister for social and family affairs, has issued an International Women’s Day message warning working women to save more for their retirement.
”The final pensions coverage figures for 2005 show 618,000 men, or 54.2%, have an occupational or private pension compared with some 400,000, or 47.5%, of women,” he told a conference.
“When you take away those on public service pensions, then the picture is even bleaker. In other words, it is quite possible that only one third of working women outside the public service have pensions and many of these have pensions that are far from adequate.”
Brennan appealed to women with inadequate or non-existent pensions to consider putting at least some of their SSIA savings into planning for their security in later years.
By Lisa Haines
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.