UK - The Pension Protection Fund (PPF) has handed out its first mandates to Insight Investments and PIMCO, while State Street Bank has been appointed as custodian.
Goldman Sachs Asset Management has also been selected as fund manager with deferred appointment.
A PPF spokesman said that the mandates would be funded out of the fund’s levy which was set at around £150m for the first year and set to rise to £300m annually in subsequent years. All managers have been hired on a three year contract.
Publishing its statement of principles today, the PPF said that it would adopt a “proactive” approach to asset management matching assets to liabilities and the initial levy would be invested in bonds and cash.
Lawrence Churchill (pictured), chairman of the PPF said: “The Statement of Investment Principles demonstrates the PPF’s commitment to managing its assets effectively and appropriately to protect the interests of both levy payers and beneficiaries alike.
“Our investment objective is to have sufficient funds to pay compensation to scheme members of eligible schemes that transfer into the fund. To help achieve this we will be adopting a proactive approach to asset management, seeking to match our assets as closely as possible to our liabilities in the long run.”
In a statement, the PPF said that the Statement of Investment Principles, which will be reviewed annually, sets out that monies collected through the initial first year levy will be invested in government bonds, non-government bonds, index-linked bonds and cash and derivative instruments relating to these asset classes.
The PPF went “live’ on 6 April and serves as a guarantee fund for underfunded occupational pension schemes after their sponsoring employer has gone insolvent. It will derive its assets from contribution from defined benefit and hybrid occupational pension schemes.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.