SPAIN - Spanish pension funds registered an average return of 2.3% for the first quarter of 2004 as compared to 8.1% for the entire year 2003.
Xavier Bellavista, a consultant at Mercer said: “This 2.3% median return for Q1 2004 is basically as a of consequence of existing market conditions, and the main reason for this return is the investment strategy adopted by the pension funds.”
A survey conducted by Mercer found that pension funds in the upper quartile returned 2.9% while pension funds in the lower quartile. The upper and lower quartiles are the spread between different investment strategies.
Pension funds have also increased their allocation to fixed income to 43.2% in the first quarter of 2004 from 39.4% in Q4 2003, while euro fixed income rose to 42.4% from 36.6%. Cash has been cut to 19.6% from 23.9%.
Exposure to equities remained largely unchanged at 35.1% in Q1 2004 from 34.9% in Q4 2003.
Bellavista explained: “Historically, Spanish pensions funds have invested around 35% in equity and 65% in fixed income and others. This structure is maintained in Q1 2004. The main differences between Q4 2003 and Q1 2004 are the substantial growth in Euro fixed income against a decrease in the percentage invested in cash.
“This can be viewed as a correction in the 2003 trend of reducing the percentage of assets invested in fixed income versus an increase in cash .”
The People's Pension, Atlas Master Trust and The Cheviot Trust have been granted authorisation from The Pensions Regulator (TPR), taking the total number of authorised master trusts to 18.
Pension schemes have been warned they may now face a more challenging legal test if they wish to fix drafting errors.
The Greene King Pension Scheme has appointed XPS Pensions as its actuarial and investment adviser following a competitive tender process.
Professional Pensions has compiled a list charting the progress of master trust authorisation. View our list in full here...