(March 27, 2013) — The CEO of the UK’s Pensions Regulator is to join one of the largest pension funds in the country in also as chief executive.
Bill Galvin, who has led the monitoring body for the past three years, is to join the £34 billion Universities Superannuation Scheme (USS) in August as group CEO, the two institutions announced today. He will leave the regulator in June, and in his final three months of tenure will have no dealings with defined benefit (DB) fund issues, due to potential conflicts of interest.
Galvin is to join USS during a significant growth spurt.
Over the last two months, the scheme, which registered its own investment company with the national Financial Services Authority (FSA) in September, has appointed several senior employees.
Since the start of February, USS has appointed Philip Hunter, formerly of Old Mutual Asset Management, as pacific portfolio manager; Julien Woler, formerly of RBS, Citi, and UniCredit as a senior trader in its asset allocation team; and Laetitia Muir, with experience at numerous large investment banks and asset managers, as legal counsel and head of compliance.
This followed the appointment of Russell Investments’ fiduciary head in the UK, Heath Mottram, and an entire team dedicated to infrastructure investment towards the end of last year.
Roger Gray, CIO of the pension fund, told aiCIO last year: “”When I joined [USS] we had over 70% allocated to listed equities, but now the strategic allocation is 50%. Alternatives were envisaged to grow to 20%-they have just about done so-and bonds are now up to 20% from 10%, part of which is in non-government and emerging market debt. The in-house headcount is around 100-we have added a multi-asset and an emerging markets team, and have built up the control and operational functions.”
Galvin’s appointment follows the announced retirement of the current USS CEO Tom Merchant.
Galvin said: “Large, well governed schemes like USS are the best model for pensions delivery in this country, and I look forward to working with the trustees, the executive and the sector. I’m joining USS at a time that for pensions is both exciting and challenging: the task of supporting the USS trustee board in meeting the current and future expectations of scheme members, employers and other stakeholders is one of considerable responsibility, and I am looking forward to leading the team.”
The move leaves the organisation that oversees the UK’s 7000-plus pension funds without a leader. In last week’s Budget, the UK Chancellor said the regulator’s powers and duties would be changing.
The regulator was initially established to help prevent DB funds attached to collapsed companies from ending up in the Pension Protection Fund and promoting and improving the administration of work-based pensions.
It was given a “new objective to support scheme funding arrangements that are compatible with sustainable growth for the sponsoring employer and fully consistent with the 2004 funding legislation”, the regulator said last week.
While the recruitment process takes place, the regulator’s work on DB schemes will be directly overseen by the regulator’s chair Mr O’Higgins, and managed by the regulator’s executive director for DB regulation Stephen Soper.
Galvin’s appointment is dependent on approval by the FSA.
Related content: Interview with Roger Gray, CIO of USS & We Don’t Use Asset Managers-We Are One.