UK/EU - New EU pension rules will slash administration costs for multinational giants, a study by Datamonitor claims.
The market analyst said the European Occupational Pensions directive will enable companies like Shell and BP to consolidate separate mandates into one centrally-run fund.
Analyst Nicholas Stephens said: “This equates to a massive saving and gives them a lot more simplicity.
“A company like Siemens with operations right across Europe could have a fund managed from one London office.”
And Datamonitor predicts the consolidated mandates will be run by the biggest asset management firms.
The Investment Management Association estimates the directive will generate more than £3bn for the asset management industry across the EU.
The new directive, which must be implemented by all member states by October 1, 2006, requires every scheme to have sufficient and appropriate assets to cover “technical provisions at all times”.
Lawyers say the term is deliberately vague to account for the UK’s specific funding requirements.
The directive also sets out “investment rules” for schemes. It states that assets should be “properly diversified in such a way to avoid excessive reliance on any particular asset, issuer or group of undertakings and accumulations of risk”.
Schemes will not be allowed to invest more than 70% of their whole portfolio in equities, negotiable securities treated as shares and corporate bonds.
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
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