Atriax Defeated in Forex Wars

Brennan Succeeds Bolsover at Baring Asset Management Baring Asset Management, a unit of ING Group, has appointed David Brennan chairman and chief executive, effective July 1.Brennan has been with the company for 14 years and has been chief executive of

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Brennan Succeeds Bolsover at Baring Asset Management
Baring Asset Management, a unit of ING Group, has appointed David Brennan chairman and chief executive, effective July 1.Brennan has been with the company for 14 years and has been chief executive of the Investment Management Group for the past five years. He was appointed deputy chairman in 2001, according to Dow Jones.Brennan succeeds John Bolsover who will retire at the end of June.Peter Wolton will replace Brennan as chief executive of the Investment Management Group.3Plansponsor.comUK: Stakeholder Pension Revolution Fails to Ignite
The UK’s stakeholder pension program, touted as the solution to the nation’s savings shortfall, is failing to live up to the government’s expectations, a study has shown.The government had hoped that half of the UK’s five million low-income earners, who have no access to employer sponsored plans, would take advantage of the stakeholder pension plans, which charge lower management fees.However, according to the Association of British Insurers (ABI), only 619 million flowed into the new plans by the end of 2001, nowhere close to the estimated savings shortfall of 27 billion per year. The figures, gathered from the 47 of the 50 stakeholder plan providers, showed that around 750,000 people had bought a stakeholder pension by the end of February, and contributed 81 per month to the plan on average The minimum contribution is 20 a month and the maximum is 3,600 per annum.These numbers are inflated by two factors:retirement savers, who are transferring money from existing plans into stakeholder plans to take advantage of the lower fees workers, who are contributing through an employer-based plan. Small businesses that don’t provide retirement plans to their employees must arrange stakeholder pensions for them.About 320,000 employers were now making stakeholder pensions available to their staff, falling short of the government’s target of 350,000, according to the ABI.The ABI also noted that while limited data was available on the income levels of stakeholder investors, the data that were available showed that most were earning between 10,000 and 30,000 per year. The government had aimed to attract those earning 9,000 and 18,000.The stakeholder pension plan however, has not been a total disaster. After being introduced in a difficult year for investing, it has forced changes in the industry, placing downward pressure on management fees and forcing consolidation. There is also the expectation that the government may make employers’ contributions to stakeholder plans compulsory.3Plansponsor.comEnron Lawyers Baulk at State Street Fees
A much ballyhooed agreement brokered by the US Department (DoL) to install new management over Enron’s retirement plans is apparently unravelling. According to a Houston Chronicle report, Enron lawyers complained to US Bankruptcy Judge Arthur Gonzalez that the company should not be required to pay $2.7 million yearly to hire State Street Bank and Trust to oversee its three retirement programs. Together, the plans have about $1 billion in assets.Enron attorney Brian Rosen said the company didn’t want to be “taxed” by being responsible for State Street’s fees. Gonzalez ruled that the plan members should foot State Street’s bill (see Judge Overrides DOL, State Street Agreement on Enron) and that the Boston-based State Street should continue managing the plans until the issue is resolved. State Street Ponders ResponseRoseman told Gonzalez that State Street has to decide whether it will stay in the deal if the plans end up paying the company’s fees. Enron’s sudden turnaround comes after the company signed a DoL agreement to bring in State Street to replace Enron’s existing pension committee. For their part, DoL officials urged a swift end to the controversy. DoL lawyer Timothy Hauser said an undue delay would only further hurt Enron employees and former workers who already have lost thousands of dollars in retirement funds when Enron imploded. If Enron sticks to its position of departing the State Street deal, DoL may sue the company to force the appointment of a new pension manager. UBS to Compensate US Pension Fund
UBS PaineWebber will pay $10.3 million to the City of Nashville to settle a dispute over the amount of the firm’s fees as exclusive investment consultant to Nashville’s pension fund.Government officials had also complained that UBS PaineWebber understated the risks of the investments it recommended and misled them about its recommended investment strategies. The fund ended its relationship with PaineWebber in 2000.The cornerstone of the deal – that PaineWebber would be paid based on the number of portfolio trades – became a key part of the dispute. Many in the investment community charge that such a compensation arrangement gives an advisor too great an incentive to advise unnecessarily frequent trades.The lion’s share of the settlement will go to the $1.4 billion fund, which covers city employees. The remainder will pay legal fees.”We felt they were overcompensated, we felt the agreements were not clear, and we thought we could have gotten a better deal,” said Karl Dean, director of law at the legal department of the Metropolitan Government of Nashville and Davidson County, Tennessee. Fund Made Money Nashville officials may have had problems with PaineWebber’s fees and some of its consulting, but the fact remains that the city’s pension fund made money with PaineWebber’s advice. For the five years ended December 1999, for example, the fund had an average annual gain of 18.47%.But a KPMG April 200 audit maintained that PaineWebber’s fee arrangement was poisoned with potential conflicts and built up too many trading commissions. The audit also concluded that PaineWebber had misrepresented the consequences of some of its advice.CriticismBecause of the fund’s unusual fee and commission arrangement, PaineWebber earned excessively high fees on its trades, KPMG concluded. For the year ended June 30, 1999, consulting fees were $788,747, compared with fees for similar public funds of $92,000 to $163,000 in 1998. PaineWebber also kept the pension fund in the dark about its individual managers’ returns and risks in the portfolio, according to the KPMG review.A PaineWebber spokesman said: “The Nashville Metro Board pension fund had an outstanding record of performance while UBS PaineWebber was a consultant to the fund. UBS PaineWebber strongly disagrees with the one-sided criticisms and conclusions in the KPMG report. Although we believe that our compensation was reasonable, we decided to resolve this matter amicably.”3Plansponsor.comBond Funds Lag Equity Funds in First Quarter
US bond funds edged up by 0.28% in the first quarter of the year, lagging behind the 0.36% return of stock funds, as investors digested the early signs of an economic rebound reflected in recent data releases.Fixed income funds, which represent a combined $2.5 trillion, slipped by 0.42% in March on interest rate concerns, trimming gains made in January and February, when funds increased by 0.39% and 0.42% respectively as investors sought refuge from stocks beaten down by the wave of accounting scandals.According to data from Lipper, Inc, the average fund rose 0.28% over the quarter, after rising by 0.93% in the final quarter of 2001.Target Maturity, Treasury, Junk BondsIn March, target maturity funds, which hold longer-dated securities and move in tandem with long-term Treasuries, were the worst performers, receding by 5.01%, after a 1.41% gain in the previous month. Over the quarter, target maturity funds dropped 2.37%.The pattern was the same among US Treasury and government funds, which fell by 2.01% and 3.13% over the month, after increasing by 1.01% and 0.95% in February. Meanwhile high yield, or junk bond funds rebounded in March, increasing by 1.97% gain after dipping 1.38% in February. Over the quarter, they were up 0.99%, a meager gain in comparison to the 5.31% increase posted in the previous quarter. Among fixed income funds, emerging market funds led the pack, ballooning 6.94% over the quarter, after a 8.59% gain in the final quarter of 2001.3Plansponsor.comWM Mercer Becomes Mercer HR
Only cynics will have checked the date on the announcement by consulting firm William M. Mercer that it would be changing its name to Mercer Human Resource Consulting. (It comes a week too late for All Fools’ Day.) But even they will be relieved that the fifty-seven-year-old consulting firm, owned since 1959 by Marsh & McLennnan, has not paid a branding consultancy a six figure sum for an Hellenic-sounding neologism.What the name change really signifies is the commoditisation of what most custodians would name as the core business of the consultant: choosing fund managers on behalf of plan sponsors. In reality, consultants now make their fattest margins advising corporate clients on the full range of employee benefits. Over the past decade, Mercer has extended its consulting capabilities into virtually every area of human resources, largely by acquisition. Over the last twenty years, the firm has devoured Sedgwick Noble Lowndes, Corporate Resources Group, MPA Limited and Duncan C. Fraser & Co. in the United Kingdom, Europe, and Asia; John Eriksen & Partners, Campbell & Cook, and E.S. Knight in Australia and New Zealand; and Meidinger, Inc., A.S. Hansen, Foster Higgins, and SCA Consulting in the US.David Barford, Chairman and Chief Executive of Mercer in the UK – where the firm employs more than 3,700 staff in 17 offices – confirms that the name change is designed to reflect the consequent alteration in the revenue base. “The name Mercer Human Resource Consulting encompasses the full range of resources that we, as a global company, can bring to bear on behalf of our clients,” he says. “Mercer’s strong growth in human resource consulting reflects the increasing recognition that, by investing in their people, organisations can improve performance and profitability.”In conjunction with introducing its new identity, Mercer is launching, a website offering do-it-yourself tools for HR professionals and products that users can purchase online. The investment consulting business, Mercer Investment Consulting, will be relegated to a single section on the new site (’s Turpin Joins Old Mutual
The former manager of Putnam Investments’ defined contribution business, has been named vice president and chief operating officer of the US asset management group of Old Mutual plc.Thomas Turpin, 41, led Putnam’s defined contribution client service, sales, investment servicing, product management, marketing and 401(k) rollover areas until several months ago when the defined contribution area was moved under the aegis of John Brown, who is also responsible for Putnam’s defined benefit business.Turpin had been at Putnam since 1993.Before Putnam, Turpin had held several executive positions with The Boston Company – primarily in the Master Trust and Custody Division – from 1982 to 1993. In addition to Turpin, Old Mutual also tapped Kevin Hunt, formerly of Morgan Stanley, as its executive vice president and director of sales, marketing, and product development.The appointments for the two Boston-based positions were effective Friday.3Plansponsor.comPlan Sponsor Survey Confirms Under-Funding Trend
Slumping markets and looming liabilities combined to put the squeeze on pension plan funding levels last year, according to PLAN SPONSOR’s 2002 Defined Benefit survey.While last year’s data found 57% of plans were overfunded, the latest data show that dipping to 48%. Despite enjoying better market returns, on average, than their larger kin, smaller plans were much more likely to coming up short on the funding side. More than 31% of respondents with less than $10 million in assets are only 80% to 94% funded, while, among larger plans, 75% of those with between $1 billion and $10 billion in assets are overfunded and 80% of those with more than $10 billion. Weak equity markets explain part of the dropoff in funding, but plan sponsors also blame the historically low yields of the 30-year Treasury bond that is used in the funding calculation. The low rates of return translate to artificially high funding requirements. Against respondents’ average long-term actuarial target return of 8.7%, returns for our plan sponsor sample are paltry, particularly when coupled with last year’s meager return of 4.1%. However, sponsors seemed more complacent this year about manager performance, with nearly a quarter reviewing manager performance just once a year, versus 16% conducting annual reviews a year earlier. More sponsors were meeting with managers just once a year, as well-through fewer were content to hold such meetings as necessary. Funding GapsIn total, 50.7% of plan sponsors made contributions to their pension plans within the last year, down from 62% a year ago. Despite the overall gap in funding – or perhaps because of it – smaller plans were more likely to have made a contribution within the last year. More than two-thirds (68.75%) of plans with less than $10 million in assets under management had done so, compared to:37.5% of plans with $500 million to $999 million in assets 36% of plans with $1 billion to $9 billion in assets 40% of plans with more than $10 billion.Future Tense?As for the future, no less than 62% of almost 400 fund officials responding to our survey in January told us that they planned to make contributions to their defined benefit plans within the next 12 months-the same percentage that planned to make such contributions over the course of 2001. Among plans with less than $10 million in assets, three-quarters intend to pour in money this year, up from the 69% who planned to make funding contributions last year.Keeping TrackThe share of respondents who rely on the expertise of investment consultants dipped just slightly to roughly 78% versus 81% a year earlier – and a slim majority (59%) of sponsors require their managers to be AIMR compliant with their performance reporting. Roughly a third of plans with less than $200 million in assets – didn’t know. Still, most pension funds also increasingly measure their performance against their peer universe. Some 79% measure their performance this way, up from 77% in the previous survey. Smaller plans are less likely to do so – only 69% of plans with less than $10 million in assets engage such benchmarks versus 80% of plans with more than $10 billion in assets. 3Plansponsor.comAtriax Defeated in Forex Wars
Online foreign exchange trading platform Atriax announced Friday that it would close, citing failed merger negotiations with rival platform FXall. And now Citicorp is expected to join FXall, according to Reuters, citing market