CROYDON, England - Sedgwick Noble Lowndes Ltd. has launched a defined contribution vehicle for smaller U.K. companies that will offer participants a choice of seven investment options run by specialist managers.
The vehicle is designed to enable money purchase and group personal pension plans with up to (pounds) 15 million ($23.4 million) in assets and 20 to 500 participants to obtain enhanced performance through access to specialist managers. In addition, use of a multimanager structure avoids the costs of changing managers, which could amount to 2% or 3% of fund assets for a small scheme.
Now, smaller U.K. defined contribution plans can choose only one provider for investment and administration. About 90% of new plans set up in the past few years have been defined contribution plans, said Paul Haines, investment director.
Using its expertise as an investment consultant, Sedgwick Noble Lowndes will select and monitor the managers.
Initially, seven investment options will be offered. Picked to run U.K. equities was M&G Investment Management Ltd., while overseas stocks will be managed by Schroder Investment Management Ltd. Gartmore Global Strategies will manage both U.K. and overseas passive equity portfolios; Prudential Portfolio Managers Ltd. will handle U.K. bonds and index-linked gilts; and Winterthur Life U.K. Ltd. will run the cash portfolio. All managers are based in London except for Basingstoke-based Winterthur.
Assets will be commingled in separate pools based on investment style using a life insurance company fund structure, said Owen Sweetman, project director.
The consultant also will provide administration services, including an online facility for pension managers and a telephone helpline to aid plan participants.
Independent trusteeship services for group personal pension plans also will be supplied by Sedgwick Noble Lowndes.
Mr. Haines said there will be no conflict between the consultant and money managers it would consider in other searches. "The key aspect here is that trustees or individual members of group personal pension schemes need to make the decision whether they want to maintain control of the managers or they want Sedgwick Noble Lowndes to do it on their behalf," he said.