Home ListingAugust 8, 2013

Church Pension Appoints Bond Specialist to Board

<em>As deficits widen, one pension fund decides technical knowledge is needed.</em>

Reported by Featured Author

(August 8, 2013) — The Church of Scotland Pension Fund has appointed a high-ranking bond specialist at one of the nation’s largest fund managers as its vice chairman, aiCIO can reveal.

Graeme Caughey, head of government bonds and global head of rates at Scottish Widows Investment Partnership (SWIP), was officially awarded the role by trustees at a meeting in May, minutes show.

He replaces Arthur Priestly, who had held the role since 2009 and been involved with the pension for more than 20 years. Priestly, who retired after more than forty years as a professional in the insurance industry, had overseen much of the Church’s investments. Minutes state that as head of the risk group he kept the Church’s fund “safe from accidental error and ensured that all the risks [it runs] are identified and dealt with satisfactorily”.

In May, the Church announced it was taking measures to address the funding deficit in the pension plan. During a debate at the General Assembly in Scotland, Church Commissioners heard that increased longevity and volatility in world financial markets meant there would likely be a shortfall of more than £30 million in its pension funding.

The pension’s total assets were reported to the trustee board in May as being just in excess of £350 million.

As a result of this debate, the Church said it would be meeting with members to discuss offering solely defined contribution pensions in future.

Caughey has a good pedigree in finance. He has responsibility for fund management, investment process, and profitability of aggregate, single currency, and global government and absolute rate of return products at SWIP. He leads the fixed income policy group which sets the firm’s bond strategy.

He told aiCIO he was pleased to take on further responsibility at the pension having served as a trustee for two years. “This role makes good use of my actuarial and investment experience for the benefit of the pension scheme members.”