US - A new study has reportedly predicted up to 75% of US corporate pension plans could be frozen or terminated within the next five years.
The findings from McKinsey&Company said the return of private defined benefit plans to health fund levels would rapidly boost the number of companies opting to freeze or terminate their plans from the current level of 25%.
The management consulting firm was also said to have warned looming accounting and regulatory changes would force plan sponsors to rapidly implement different approaches to portfolio construction.
McKinsey&Company said this could mean dominant money managers would compete with insurers and investment banks to meet their needs.
At least US$1trn of the $2.3trn now in private sector pension plans will be invested in different products and solutions by 2012, according to the study.
As a result, allocations to active domestic long-only equities are expected to drop by 67%, with long-duration fixed-income, hedge funds and private equity picking up the bulk of those losses.
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
AMP Capital has set up a dedicated team to help institutional investors, including pension funds, invest in infrastructure through direct equity allocations.