UK - The trustee of the Merchant Navy Officers Pension Fund has selected Towers Watson as the delegated chief investment officer for its £3bn ($4.7bn) pension fund.
The scheme had originally appointed Towers Watson as its fiduciary manager in 2008 but appointed KPMG to undertake a formal review of the consultant's role and best practice in investment governance last year.
The review looked at degree of engagement; maximum access to investment tools and solutions, with particular emphasis on LDI, buy-in and other insurance solutions; an integrated view of risk and return versus liabilities; and effectiveness and timeliness of decision making and implementation.
It also included research on global best-practice in fiduciary management.
MNOPF Investment Committee chairman William Everard said: "We are pleased to announce the appointment of Towers Watson as our delegated CIO. As a result of the findings of the review, we now have governance structures and working arrangements in place which we are confident will deliver optimal fund performance with the maximum degree of alignment and accountability. In designing this new Delegated CIO role, we believe we have created a best-in-class governance structure for the efficient management of large, mature pension funds."
Towers Watson global head of investment content Roger Urwin (pictured), who is the designated investment lead for the MNOPF, said: "This new delegated CIO approach brings the fast-growing fiduciary management area to a defining moment.
"The combination of exceptional clarity of performance goals versus liabilities and a dynamic relationship with the investment committee will set new governance standards, streamline operational management and make the consultant explicitly accountable as never before."
The formal review of the MNOPF's investment arrangement's were undertaken by KPMG's UK investment advisory team. KPMG's remit was to advise the MNOPF on best practice with regard to its internal operations and on the selection of a Delegated chief investment officer.
MNOPF chief executive Andrew Waring said: "Fiduciary management is still evolving in the UK as a number of investment consultants, fund managers and other specialists look to compete in the market.
"During this process we explored the full range of solutions on offer, but ultimately chose to adopt the delegated CIO model because it encompasses many of the elements of investment governance best practice and should result in the creation of real value for our fund and its members."
KPMG head of investment advisory Patrick McCoy said: "We believe that MNOPF's approach to fiduciary management - enlisting a third-party to undertake an objective, whole-of-market review and ultimately advise on an appointment - sets the industry benchmark for any other pension scheme seeking to review its governance structures."
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