Home > News > Market Moves > UK Corporate Pension Funding Falls in July
Market Moves

UK Corporate Pension Funding Falls in July

Aggregate deficit of the PPF 7800 has more than tripled over the past year.
By Michael Katz


The combined deficit for the 5,422 UK defined benefit (DB) pension plans tracked by the Pension Protection Fund’s PPF 7800 index ballooned by £24.7 billion in July to £199.5 billion ($260.4 billion) from £174.8 billion at the end of June. The deficit has more than tripled during the past year from £62 billion as of the end of July 2019.

As a result of the increased deficit, the funded ratio for the plans declined during the month to 89.9% from 91%, and is down from 96.5% at the same time last year.

The aggregate asset value of the plans in the index totaled £1.775 trillion at the end of July, down £500 million from the end of June, but up £84 billion from the end of July 2019. Meanwhile, the total liabilities for the plan were £1.975 trillion at the end of July, up from £1.950 trillion at the end of June, and up from £1.753 trillion during the year-ago month.

The number of plans in the index that were in surplus fell to 1,737 at the end of July, which accounted for 32% of the plans, from 1,805 at the end of June, which accounted for 33.3% of the plans. At the same time last year, there were 2,197 plans in surplus, or 40.5% of the plans in the index. The total surplus of the plans in surplus decreased to £106.9 billion as of the end of July from £113.2 billion at the end of June, and from £133 billion at the end of July 2019.

Want the latest institutional investment industry
news and insights? Sign up for CIO newsletters.

And the number of plans in deficit at the end of July rose to 3,685, or 68% of the plans in the index, from 3,617 plans in deficit at the end of June, or 66.7% of the plans. During the year-ago month, there were 3,225 plans in deficit, or 59.5% of the plans in the index. The aggregate deficit of all plans in deficit at the end of July rose to an estimated £306.4 billion from £288 billion at the end of June, and from £195 billion at the same time last year.

Related Stories:

UK’s Largest Pension Fund Loses 1.7% in Fiscal 2020 But Beats Benchmark

Less Tax-Efficient Funds Cost UK DB Plans £250 Million Yearly, Study Finds

UK Corporate Pension Funding Hammered by Pandemic in April

Tags: , , , , , ,

Home > News > Corporate Moves > Norges Bank Board Defends Chief Executive Pick, Again
Corporate Moves

Norges Bank Board Defends Chief Executive Pick, Again

At a parliamentary hearing, the board governor helped the hedge fund manager Nicolai Tangen, under fire since his appointment. 
By Sarah Min


The Norway central bank continued to defend its pick for chief executive at a parliamentary hearing on Monday.

Incoming Norges Bank chief executive Nicolai Tangen has drawn fire since March when he was appointed head of the $1.14 trillion fund. Among other criticisms, detractors say the role would be a conflict of interest for the hedge fund manager, who is not fully divested from London-based AKO Capital, which he founded and led. Tangen will take up the CEO position in September. 

That has drawn the ire of the supervisory board at Norges Bank, which is appointed by the parliament to audit the central bank, according to local reports. In a Reuters report, Julie Brodtkorb, head of the Norges Bank supervisory board, said, ”there’s been a breach of guidelines, regulations, and laws.”

But the Norges Bank board defended Tangen again to the standing committee. In an opening statement on Monday, Board Governor Øystein Olsen said the hedge fund manager “emerged as the decidedly strongest candidate” during the application process. Tangen beat out seven other candidates, including Norges Bank’s deputy chief, Trond Grande.

For more stories like this, sign up for the CIO Alert newsletter.

Olsen also repeated that sufficient safeguards have been installed to put distance between the central bank, AKO Capital, and Tangen. Tangen is required to step down from all directorships from his hedge fund, which will change the composition of its board, so the majority of members no longer have close ties with Tangen. 

Additionally, a trustee will exercise Tangen’s voting rights at the hedge fund, which will also be reduced to 43%. A proxy will ensure that Tangen does not know what his personal wealth is invested in. 

“Nicolai Tangen has satisfied the Board’s requirements regarding the restructuring of his financial engagements,” Olsen said. 

Olsen also pointed out that the committee has never required that Tangen fully divest of AKO Capital. “I fully appreciate the Supervisory Council’s desire to remove risk,” he continued. “At the same time, I would emphasize that any responsible board of directors must make discretionary trade-offs between different types of risk and business objectives.” 

Related Stories: 

Norway’s Sovereign Wealth Fund Selects New Chief Executive

Unease Remains Around Incoming Chief at Norges Bank 

Norges Bank Finalizes Contract with Controversial CEO Pick

 

 

 

Tags: , , , , , , , ,

«