US - Assets of the 35 worst-performing Massachusetts pension funds could come under state control, according to an analysis by the state retirement commission.
Trustees of pension funds not meeting local management criteria would be relieved of investment responsibility in efforts to improve returns and provide fiscal relief to the state’s cities and towns.
Governor Patrick Deval's director of local policy, Lydia Hill, said: “We’re not the big brother state here coming in to take over everyone’s system. We want to make sure the systems are appropriately managed.”
Hill added that the state fund returned 16.7% in 2006 making it one of the best performing in the US. This compares well with the very worst of the 35 funds returning just 1.74%.
But pension attorney Michael Sacco, who represents ten of the failing funds, accused the governor’s methodology as an over simplistic approach to a complicated issue.
He pointed out that some of the smaller funds did not have access to the riskier, higher return investment options such as hedge funds or real estate portfolios.
Some of the targeted funds have already begun moving their assets to the state fund.
Enhanced powers for The Pensions Regulator (TPR) to prosecute and fine company directors who "wilfully or recklessly" put their defined benefit (DB) pension scheme at risk will be hard to enforce, commentators say.
Melrose has pledged to contribute up to £1bn to GKN's pension schemes as part of a final offer to acquire the engineering business.
Existing master trusts will be forced to pay £41,000 when applying for authorisation under the upcoming regime, the government has confirmed.
UPDATE 2 - DWP publishes DB white paper: Stronger powers for TPR, DB chair statements to be introduced
The Pensions Regulator (TPR) will be given the power to fine company bosses who deliberately puts their defined benefit (DB) schemes at risk, the government has confirmed.