UK - Executives of the UK's Merchant Navy Officers' Pension Funds have asked existing investment consultant Watson Wyatt to alter its duties and effectively deliver fiduciary management to the pension plans.

Officials at Watson Wyatt have confirmed they have been asked to become "highly engaged" with the pension fund through its Advanced Investment Solutions group.

MNOPF trustees recently employed Andrew Waring as chief executive of MNOFP to take care of its £3.2bn (€4bn) closed pension funds and has confirmed this is his first significant change to the pension fund's strategy. (See earlier IPE story: Merchant Navy alters course on no chief exec)

The concept of fiduciary management has many labels in the UK and is still a relatively new concept compared with on the continent and Watson Wyatt's AIS arrangement allows pension funds to delegates many of the investment duties and responsibilities than might normally be asked of under a typical investment consulting role.

The MNOPF arrangement is a practical progression from the outsourcing of all of its investments over recent years, according to Waring, as Watson Wyatt will select the fund's asset managers and manage the ongoing monitoring of manager performance.

"The board have decided to appoint Watson Wyatt and have delegated the chief investment officer role, which changes the responsibilities of our team," said Waring.

"The change creates greater clarity around decision-making and the consequential accountability. If a pension fund is above a certain size there is scope to have the breadth and depth of investment experience in-house. For smaller pension funds the decisions is quite clear. Through a process of outsourcing over time, it is an inevitable step towards getting the experience and expertise on a wide range of assets and achieving a higher level of governance," continued Waring.

At the same time as Watson Wyatt has been hired as fiduciary manager, Alick Stevenson is retiring as chief investment officer for MNOPF, having been in the role since 2002.

"Alick has done a great job for us since he joined in 2002 but is now retiring from the fund to look for fresh investment challenges," added Waring.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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