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summits
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10-12 May 2010
Fairmont Le Montreux Palace, Montreux, Switzerland |
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Joanne Segars Interview
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Managing deficits is a top priority for investment directors of pension funds across Europe at the moment. Eliminating deficits altogether, however, requires a strategy based on broader knowledge and expertise. Joanne Segars, Chief Executive Officer of the National Association of Pension Funds in the UK oversees 1,200 pension schemes with 15 million members, and is perhaps one of the few people in the UK with the insider knowledge of how pension funds operate, the strategies that are successful and the trends that could work in the long run. A speaker at the marcus evans European Pensions & Investments Summit 2010 taking place in Montreux, Switzerland, 10 - 12 May, she discusses her outlook for the future, how pension funds are eliminating their scheme deficits and working their way towards a successful future. What are some of the challenges facing pension fund investment executives in Europe at the moment? Joanne Segars: The big challenge is around scheme deficits. Defined benefit schemes have had difficulties over the last several years that were made much worse by the global financial crisis. Many schemes are now facing very significant deficits and the issues for pension scheme managers and Chief Investment Officers of pension funds are how to manage or eliminate those deficits and manage liabilities over the longer term. What solutions would you recommend? Joanne Segars: We have seen schemes taking a number of different approaches, and I consider that right – there is no single cure-all. Pension funds in the UK come in many different shapes and sizes. For example, we are different from the Dutch pension fund system where there is a smaller number of very large schemes; the UK has a large number of very small schemes and a few very large ones. In the UK some schemes have taken quite innovative approaches for deficit elimination; some are negotiating much longer recovery periods with their scheme sponsor so they can pay off their deficits over a longer period of time. Others have taken contingent assets from their employers as a way to give some assurance to trustees that the employer is there to back the deficit. Some schemes have turned to buy-out solutions and others to longevity hedging solutions. We have also seen a large number of schemes closed to new employees and existing members, which is a trend that I expect will continue during the course of this year and the next. What are your projections for 2010 for this industry? Joanne Segars: My projection is one of a continuing decline in defined benefit pension provision in the UK. Here, over the last few years, a number of schemes in the private sector that were open to new members have fallen very significantly. Over the last 12 months alone, there has been a five per cent drop in schemes that are open to new employees. One of the big trends in the UK over the next year will be schemes that were closed to new employees also closing to existing members. Almost every week now, some quite large employers are taking that step. What we will see instead will be a growth in defined contribution schemes, which will bring new challenges around the default scheme design, fund options for employees, and communication issues. That will be a big issue in the UK, and elsewhere across Europe. We are getting ready for 2012 which is the year in which radical changes will be introduced in the UK – auto-enrolment, mandatory employer and employee contributions, and a new pension scheme called Nest. That will be a quasi-governmental defined contribution scheme targeted at low to moderate earners who cannot join a scheme where they work. Employees will have the right to belong to a scheme with an employer contribution. Employers already operating schemes will need to adapt to meet certain criteria which are still being finalised with Government. These changes will affect pretty much every employer in the land. There is also the uncertainty of the UK elections and how a possible change in government could affect UK pension provisions. What trends do you see playing out in the future?
Sarin Kouyoumdjian-Gurunlian
This unique forum will take place at the Fairmont Le Montreux Palace, Montreux, Switzerland, 10 - 12 May, 2010. The summit programme consists of a range of interactive platforms and case studies focused on asset management, emerging regulations and risk management. The summit format is neatly balanced by many networking opportunities over coffee breaks, cocktails and gala dinners. The event further offers an exceptional opportunity for private and customised meetings with best-in-class service providers. For more information please send an email to info@marcusevanscy.com or visit the event website at www.epi-summit.com Please note that the summit is a closed business event and the number of participants strictly limited. About marcus evans Summits marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings. For more information, please visit www.marcusevans.com All rights reserved. The above content may be republished or reproduced – kindly inform us by sending an email to press@marcusevanscy.com |
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