Pension schemes tailor targets for fiduciary managers

It is far more common for pension schemes to measure the performance of their fiduciary providers against their own unique targets than against broad industry benchmarks.

A survey, by retirement consultant Aon Hewitt, found that two-thirds of schemes use tailored performance measures compared with a quarter that use a general comparison.

“This reveals a recognition that schemes – and their needs – vary greatly, making industry benchmark analysis misleading in these circumstances,” says Sion Cole, partner and head of client solutions at Aon Hewitt.

The survey included 359 respondents from the UK pensions industry, representing about a quarter of the UK’s defined benefit pensions system.

The survey indicated that the use of fiduciary management has doubled in the last three years, with 37% of respondents now having a fiduciary arrangement in place.

“Trustees are faced with ever more complex investment decisions and have less time to deal with them, and that is driving demand for access to expertise and support from fiduciary management providers,” says Cole.

©2014 funds europe

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