The fact that pension schemes are slow to react remains a reality. Consultancy Aon Hewitt found that trustee boards continue to struggle to make swift changes in allocations to new asset classes, and three months was the most common timeframe cited.
In a survey of 57 UK-based schemes, 77% of respondents said it took a minimum of three months to take a new investment idea from discussion to implementation. Of this group, 15% reported that changes to investment strategy involving new assets can take more than a year to execute.
Zuhair Mohammed, chief executive of delegated consulting services at Aon Hewitt in the UK, said: “For some time, industry statistics have pointed to a rising proportion of pension schemes considering making investments in a wider set of asset classes. While this requires confidence and conviction based on real market insight, access to a greater range of options needn’t result in implementation delays.
“Even if trustee boards act decisively, the heightened risk aversion of fund management houses and credit teams at investment banks is, in many instances, further delaying time-to-market as legal contracts take longer to conclude.
“A more responsive governance structure remains an urgent requirement for many UK pension schemes if they are to secure a better investment outcome."
Mohanmmed said delegated consulting may be a solution for some schemes.
©2011 funds europe