UK - The deteriorating economic climate will create new conditions for pension funds in the year ahead, according to BlackRock.
One of the key trends identified was the move towards fiduciary management or fully outsourced investment plans, due to the increasingly complex and rapidly changing environment.
BlackRock said if the UK followed closely the example of the Netherlands, the fiduciary management market could grow to be worth almost £300bn (US$428.7bn), up from £2bn today.
Closely related to this, consultants were expected to increase in-house investment capabilities.
Conversely, the role of scheme buyouts or buy-ins, which saw total 2008 business of around £8bn (Globalpensions.com ; 27 January 2008) was expected to remain as a small, albeit important, niche market.
A greater emphasis would be placed on defined contribution (DC) schemes, partially due to the greater flexibility and cost / risk sharing afforded, although BlackRock also felt regulatory and governance practices would become greater.
BlackRock head of international institutional business Andrew Dyson, said: "DC is set to come of age as a valid alternative to defined benefit (DB).
"Increased emphasis will be placed on the suitability of the investment offering to members' needs - particularly the choice of default option, the quality of the administration platform and the member communication support provided."
In terms of investments, BlackRock said the past few months had demonstrated the limits of diversification. It added the best diversified funds had performed better than their peers, although schemes had learned to their cost a significant amount of 'alternatives' were repackaged traditional assets.
PTL has appointed Karein Davie as a client director in its Birmingham office.
The level of interest rate hedging increased to £29.5bn of liabilities in the second quarter as pension funds continued to de-risk, according to BMO Global Asset Management's research.
UK inflation has risen for the first time since November to 2.5% in July, up from 2.4% in June, thanks to rising fuel costs and the price of computer games.
The number of DB pension scheme trustees targeting a buyout with an insurer has increased significantly in the past five years, latest research from Willis Towers Watson shows.