Caterpillar (U.K.) Pension Plan, Peterborough, England, arranged a performance-based fee structure with its investment adviser, Mercer Investment Consulting. The new arrangement followed a recommendation in the Myners review of the British pensions industry.
"The fee structure makes it more transparent as to whether our consultant has added value to the plan, said Mike Nixon, director of compensation and benefits at the £600 million ($868 million) plan.
"For many years, fund managers performance has been measured. More recently we have disclosed the results of our own manager research recommendations, said Andy Green, the Mercer adviser to the Caterpillar plan. "Caterpillar has sought to go one stage further by linking the fees they pay us to the advice we provide.
Mercer expects more British plan trustees to measure their consultants advice as a result of the Myners recommendations, Mr. Green said.