U.K. group wants to see major pension reforms
LONDON - The National Association of Pension Funds, London, is calling for major U.K. pension reform, including a proposed "citizen's pension," an earnings-linked, flat-rate benefit of L100 a week for all pensioners (about $157 at current rates). The NAPF also would raise the retirement age to 70, from 65. Other recommendations include: providing more generous tax treatment for long-term savings; lifting rules that limit individuals to only one pension scheme; allowing employees to work for the same employer while drawing down part of their pensions; and removing restrictions on scheme contributions or withdrawals.
"Today's pension system is weighed down by red tape, jargon and complexity," said NAPF Chairman Peter Thompson in a statement. "Because of this, too many of today's workers put off thinking about pensions, storing up potentially massive problems for the future."
Quebec fund to conduct review of subsidiaries, investments
MONTREAL - The Caisse de Depot et Placement du Quebec, Montreal, plans to conduct a sweeping review of the C$133 billion (US$84 billion) pension fund and its subsidiaries, including its investments, according to Suzanne Brochu, spokeswoman.
Henri-Paul Rousseau, the Caisse's new chairman and CEO, asked for the review along with the board of directors. The review may lead to new approaches and better business practices for risk management, investment strategies and performance measurement through a management action plan to be carried out over several years, Ms. Brochu said. She said the review "is partly an asset allocation study," although it will go beyond looking at investments.
Study says continental Europe investors bailing out of stocks
LONDON - Continental European institutional investors are moving out of stocks and into bonds, and looking into different asset classes, a new Greenwich Associates study shows.
Equity allocations dropped to 30% at the end of 2001, down from 36% at the end of 1999. North American stocks fell to 4% of assets from 8% in the two-year period.
During the year ended Dec. 31, fixed income jumped to 57% of total assets from 51%.
Also, nearly 50% of continental European institutions surveyed by Greenwich plan to increase their hedge fund allocations over the next three years, and 40% of those surveyed plan to boost their private equity allocations.
In a separate study, Greenwich found German institutions slashed their equity holdings. Total average equity allocations in their portfolios fell to 19% of total assets at year-end 2001, from 27% at year-end 1999.
The proportion of European stocks in the average portfolio fell to 16%, from 22% over the last two years, and the proportion of other stocks fell to 3%, from 4%. Bond allocations rose to 60% of assets, from 55% two years ago, and cash holdings rose to 9%, from 4%.
MSCI enhances global value, growth indexes
LONDON - Morgan Stanley Capital International developed an enhanced global value and growth index series to be built for each of the 40 countries included in the MSCI All-Country World index, with a target of splitting the market capitalization of each country into 50% value and 50% growth. The MSCI EAFE index's growth and value subset indexes also will be designed using the new system. The new methodology uses eight variables, three for value and five for growth, to more accurately reflect each style.
Schroder, S&P launch fund-of-funds service
NEW YORK - Schroder Investment Management and Standard & Poor's launched a mutual fund-of-funds service for financial institutions.
S&P will handle research and analysis and recommend mutual funds, while Schroder will provide asset allocation, portfolio construction, risk management and performance measurement.