Regulation derails pension scheme funding, survey finds

gavellaw booksNearly 80% of professional investors in a survey believe that the majority of pension funds will not reach their long-term investment targets due to increased longevity and regulator constraints.

A survey by Swiss asset manager GAM finds that regulation is seen as a key barrier to generating sufficient returns and satisfying liabilities.

Just over 60% of respondents agreed that regulation needs to change to allow retirement schemes more flexibility in their asset allocation decisions.

Alexander Friedman, group chief executive officer, says: “Investors are rightfully concerned about how retirement liabilities will be met and believe that a flexible investment approach is required to remedy this.”

The survey also found that half the respondents anticipate that they will increase their allocation to active products over the next three years, with only 13% planning to increase their investment in passive products.

A further 38% plan to increase portfolio allocations to alternative investments during the second half of 2015, 35% to European equities and 27% to emerging market equities.

Seventy-eight institutional and wholesale investors from across the globe took part in the survey.

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