INCLUDING: US - Pru sues State Street; UK - Emap pension offload
US - Pru sues State Street
The Wall Street Journal reported that Prudential Financial Inc. has sued State Street for US$80m in losses ascribed to “undisclosed, highly leveraged” investments. The affected funds were thought to have been hit by the fallout of the US sub-prime crisis.
According to the report, Prudential alleged that State Street has changed investment strategy over the summer, moving pension funds from bond-like assets providing “stable, predictable returns” to risky securities based on US mortgage swaps.
UK - Emap pension offload
Beleaguered media giant Emap is believed to have put its pension fund up for sale as part of the dismantling of the company, reported the Observer newspaper.
It was reported that Lazard and Citigroup have been appointed to advise on a possible sale that could be worth up to £2.5bn. The company pension fund is worth around £136m.
This week's edition of Professional Pensions is out now.
Nearly 60% of UK employers consider defined contribution (DC) master trusts to be the "most suitable" pension fund for their employees, according to research by Buck.
Companies which have tried to dodge their pension duties by changing their identities are being "hunted" by The Pensions Regulator (TPR) in a crackdown on non-compliance with auto-enrolment (AE).
Removing liquidity restrictions would enable DC funds to capitalise on the potentially higher and safer returns that DB schemes have benefitted from, says Patrick Marshall.