Compliance deadline looms
LONDON - Trustees of U.K. employer-provided pension plans could find themselves in hot water if they don't step up their implementation of the requirements under the Pensions Act 1995, a pension specialist warned.
With less than six weeks to go before the law's April 6 compliance deadline, implementation of the rules is "patchy," said Peter Rowley, pensions partner at the accounting firm Grant Thornton in London.
"It is clear that some schemes have a lot to do in the remaining time if they are to be sure of compliance," Mr. Rowley said last month as he unveiled a survey showing more than one-third of employer-sponsored pension plans have not put new procedures into place in at least one key area.
What's more, new whistleblowing rules from the Occupational Pensions Regulatory Authority requiring plan actuaries and auditors report even minor breaches has generated a furor among pension experts.
One area OPRA is concerned about is whether benefits have been equalized for men and women, a very complex area. However, the regulator said it will not penalize all breaches, particularly in early stages of the law's implementation.
Still, reporting all violations "could prove time consuming and costly" and will generate "an overwhelming number of reports," according to a report by William M. Mercer Ltd., London.
OPRA officials said they will take a "pragmatic" approach, enabling trustees to show they are making progress, an agency spokesman said.
"We want to see determination on their part," the spokesman said.
The regulator will be able to impose penalties for non-compliance, ranging from fines of up to (British pounds) 50,000 ($80,000) to removing individuals as plan trustees. In serious cases, the authority will bring criminal charges.
Korea fund tops emerging market universe
The Korea Small Companies Trust was the top performing emerging markets fund in 1996, with a total return of 168.95%, according to Micropal Emerging Market Fund Monitor.
The phenomenal return came despite the generally poor performance of the Korean stock market overall. Micropal attributed the fund's performance to the fund's holding of Medison Co., a stock that soared after its early 1996 listing on the Korean Stock Exchange. The $2 million Korea Small Companies Trust is managed by Korea Investment Trust Co., Seoul.
The rest of the top 10 funds were Russian and Eastern European funds, according to Micropal's data. Three Russian funds of Hong Kong-based Regent Pacific Group finished among the top six, including White Tiger Investment Co., which ranked second for the year with a whopping 150.46% gain; fifth-place Blue Tiger Investment Co., up 137.53%; and sixth-place Red Tiger Investment Co., up 122.6%, Rounding out the top five for the year were third-placed Firebird Fund L.P., a Russian fund that rose 145.61%, and fourth-place Mercury ST Eastern European Fund, up 137.95%.
Technically, Key Emerging Value, which gained 60.33%, was the top performing fund in Micropal's global emerging markets equity fund category. But according to Micropal, that fund does not invest in Asia or Latin America and instead focuses on Eastern Europe, the Middle East and Africa. That makes London-listed Govett Emerging Markets Investment Trust, which gained 41.71%, the top-performer with a global mandate, Micropal reported.
Gartmore announces personnel shifts
LONDON - Gartmore Investment Management PLC named Andrew Brown and Chief Investment Officer David Watts as joint chief executives, taking over day-to-day management responsibilities from Chairman Paul Myners.
The announcement follows news that Mr. Myners will head a new wealth management sector for the NatWest Group, combining the services of Gartmore, NatWest Life & Investment Services, NatWest Ventures and private bank Coutts & Co. Mr. Myners remains chairman of Gartmore.
Mr. Brown, currently chief operating officer, will assume responsibility for Gartmore's business divisions, overseas businesses and operational matters. A new chief operating officer will be appointed.
Mr. Watts remains chief investment officer, while Andrew Fleming, formerly head of international equities, has been named deputy CIO.
Glasgow Investment has top performance
GLASGOW - Glasgow Investment Managers Ltd. again topped the CAPS quarterly survey of U.K. pooled pension funds, returning 28.8% in 1996 compared with the median of 10.7%.
The manager's Glasgow Integrated Pension Scheme Investments also is the top-performing balanced fund (including property) for the two-, three-, four-, five-, six-, seven- and eight-year periods. For the five-year period, the fund returned a compound-annualized 25.7% vs. the median's 14%.
Behind Glasgow's outperformance is its willingness to take bigger bets than the conventional manager, explained Susan Murray, marketing director. Last year, the manager invested heavily in U.K. equities, staking 70% of assets as of year-end in the asset class, compared with an average allocation of 58.3%.
The message is hitting the U.K. marketplace. At year-end, the pooled fund had (British pounds) 26 million ($42 million). Assets under management since have grown to (British pounds) 40 million ($65 million).
Zurich Life Assurance Co. Ltd. and Swiss Life (U.K.) PLC also performed strongly last year, each up 15.2% in the balanced fund including property universe measured by the Leeds-based Combined Actuarial Performance Services Ltd.
For the five-year period, Fuji Investment Management Co. (Europe) returned an annualized 21.4% and Abbey Life Investment Services Ltd. returned 20.8%.
Capital Group takes 10% in Liberty pension unit
LONDON - Capital Group International Inc., London, will acquire a 10% stake in Liberty International Pensions Ltd., London, the defined contribution money management unit launched by Liberty International Holdings PLC in January.
Liberty International Pensions, which operates under the brand name PensionStore, is now 80% owned by Liberty International. The British Telecommunications Pension Scheme owns the remaining 10% interest.
Under the latest agreement, Liberty International Pensions also becomes London-based Capital International's preferred provider for U.K. defined contribution plans.
As previously reported, Capital is the preferred manager for Liberty International Pensions' global equities fund, while Hermes Investment Management Ltd., which is owned by the BT Pension Scheme, will provide indexed and enhanced indexed investment management.
EURACS names new chairman
Huw Wynne-Griffith, senior partner of actuarial firm Barnett Waddingham & Co., London, was elected the new chairman of EURACS, starting April 1.
Mr. Wynne-Griffith takes over from retiring chairman Markus Nievergelt, legal counsel for Prevista Vorsorge AG of Zurich.
EURACS - the European Actuarial Consultancy Services - is a network of independent actuarial firms in Europe. It currently is represented in 16 European countries and has affiliations in North America, Australia and South Africa.
Japan weighs down international returns
International stock markets fell 3.6% in January, weighed down by Japan's 10.9% loss, according to the MSCI EAFE Index.
The MSCI World Index gained 1.1%, as U.S. stocks increased 6.7% and Canadian stocks grew 4.8%. Other strong developed markets were Italy, up 10.5%, and Finland, up 6.6%.