UK - Balanced pooled pension fund returns fell by nearly 15% in the 11 months to November 2002, a survey by HSBC Actuaries and Consultants reveals.
The consultant’s IMAGE survey suggests that for the whole of 2002 the value of balanced funds will have declined significantly – marking the third consecutive year of negative returns for pension funds.
This follows falls of 11.3% in 2001 and 3.9% in 2000 – marking an average annual fall over the past three years of around 8.5%. The annualised figures for five years are slightly positive at 0.4% per year.
HSBC senior investment consultant Paul Watson said: “Three years of negative returns means that every occupational pension scheme in the UK will have had its triennial valuation against a background of falling equity returns.
“This has been a big factor in the number of defined benefit schemes closing to new members.”
HSBC noted that pension funds should adjust their equity weightings to make investments perform better.
Watson added: “To succeed in 2002, managers should have underweighted equities in favour of bonds, property and cash.
“Yet the majority of balanced funds retain their herding instinct, in that 27 of the 39 surveyed have an asset allocation strategy within 1% of the median UK equity exposure of 53.2% of all funds invested.”
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.