UK - Schemes will slash their equity weightings in order to increase their bond allocations and move to liability-driven mandates, fund managers claim.
Research carried out by the Investment Management Association shows fund managers believe the 56% equity weightings held by pension funds will fall sharply. They believe equity levels will fall to levels similar to life funds, where the average weighting is 31%.
Bond investments currently make up 33% of pension fund portfolios and the 113 IMA members surveyed – who collectively manage £2trn on behalf of UK-based clients – expect this to increase at the expense of equities. Liability mandates will also benefit from moves to cut equity weightings.
IMA chief executive Richard Saunders said: “The emerging trend of liability-based benchmarking is likely to result in an increased level of bond investment, and illustrates firms’ ability to adapt to a changing environment.“
HMRC has confirmed providers operating relief at source pension schemes can continue to collect automatic tax relief at a basic rate of 20% under new Scottish Income Tax rules.
The Pensions Regulator (TPR) is seeking "improved" powers to set a schedule of contributions in defined benefit (DB) schemes in the government's upcoming white paper, it has revealed.
New regulatory rules which require providers and advisers to produce annuity illustrations will not solve the problem of consumer detriment as they are "fundamentally" flawed, according to Retirement Advantage.
Paul Budgen is set to join financial technology and auto-enrolment (AE) firm Smart Pension as director of business development.