UK - Pension trustee boards continue to struggle to make swift changes in allocations to new asset classes, research by Aon Hewitt shows.
In a survey of 57 UK-based schemes, conducted as part of Aon Hewitt's webinar series on global pension risk, 77% of respondents cited a minimum three month timeframe to take a new investment idea from discussion to implementation. Some 15% claimed changes to investment strategy involving new assets can take more than a year to execute.
Zuhair Mohammed, chief executive of Delegated Consulting Services at Aon Hewitt in the UK, said: "For some time, industry statistics have pointed to a rising proportion of pension schemes considering making investments in a wider set of asset classes. While this requires confidence and conviction based on real market insight, access to a greater range of options needn't result in implementation delays.
"Even if trustee boards act decisively, the heightened risk aversion of fund management houses and credit teams at investment banks is, in many instances, further delaying time-to-market as legal contracts take longer to conclude.
"A more responsive governance structure remains an urgent requirement for many UK pension schemes if they are to secure a better investment outcome. With a delegated consulting model decisions can be enacted within days, minimising opportunity cost and ensuring that timing works in the interests of the schemes. This may not be the right solution for all, but we would urge schemes to find a solution that combines informed decision making and agile execution."
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