UK - Almost half of the UK's largest occupational pension schemes intend to review their investment management arrangements following the Unilever Superannuation Fund vs Merrill Lynch Investment Managers (MLIM) settlement, according to a survey by SEI Investments.
The survey revealed that 47% of financial directors and pensions fund managers at 30 large UK companies intend to review their investment management arrangements.
The research identified specific concerns of pension fund trustees relating to transparency, communication, professionalism and procedures highlighted by the landmark case.
The pension professionals surveyed agreed that the case raised a number of critical issues for investment funds. Responses found that:
-73% felt that the court case put more responsibility on trustees.
-87% felt that the case raised the issue of professionalism and duty of care towards trustees.
-83% of funds indicated their requirement for a clear and more efficient flow of information from their investment managers and consultants.
-47% said that in light of the case they were thinking of reviewing their own arrangements.
-50% felt that the way their investment manager kept them informed of the progress of their fund could be improved.
-53% were very or definitely interested in a process that constantly monitors their investment manager to ensure that the risk taken is appropriate to their mandate.
Patrick Disney, head of institutional business development UK at SEI, said: “The Merrill Lynch court case has raised several questions about the existing pension fund management model.
“Concerns about transparency, communication, responsibility and procedures which were highlighted by the case, were mirrored by the issues raised by both the Myners Report and by the introduction of the new accounting standard FRS 17.”
“These combined concerns are encouraging trustees to reassess their existing pension fund management arrangements.”
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