UK - British American Tobacco has merged its BAT and Rothmans' pension schemes and is set to conduct an asset liability study of the combined fund in the third quarter.
The newly combined fund is worth approximately £1.4bn, Jim Stephens, pensions manager at the BAT pension scheme said. The fund will first undergo a valuation before the study begins, he said.
The valuation will begin at the start of the second quarter, and Stephens said that he expects the asset liability study to be finished by the end of the year. He also said that he thought that it was unlikely that any managers will be dropped as the fund is “reasonably satisfied” with their performance. The fund is entering a period of consolidation after all the upheaval, he added.
Stephens said he believed that the most likely outcome of the study would be that money would be moved between existing managers. He went on to say that if the asset allocation is changed, then the fund will move money into fixed income at the expense of equities. More specifically, Stephens said that the increase would be in the form of more corporate bond mandates, as there is a lack of government debt.
The fund is advised by William M Mercer.
BAT and Rothmans completed their £13bn merger in June 1999. At the time, BAT was the second largest international tobacco company, and Rothmans the fourth.
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