SOUTH AFRICA - The R19bn ($2bn) Eskom Pension and Provident Fund is to switch from a final salary to a defined contribution (DC) scheme by the end of next year.
Pension fund trustees at the electricity company will meet on November 15, 2001 to begin a review of the investment strategy and discuss a possible alteration of the existing asset structures.
Pension fund manager Fabian De Beer said the review of the investment strategy may imply taking funds out of one asset class and investing them in another. He added that new asset classes may be considered, but only after the inception of the DC arrangement.
De Beer said in future the fund will be looking at investing in a local value growth product having already explored this product offshore.
He concluded that the investment review will not affect more than 40% of the assets.
The Eskom Pension and Provident Fund is invested in equities (51%), bonds (25%), cash (14%) and property (10%). The fund has two local bond managers, one offshore bond manager, three offshore equity managers and six local equity managers.
By Janet Du Chenne
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.