Nationwide Pension Fund Annual Review

The 2007/2008 edition of the Nationwide Pension Fund Annual Review is out now. Here are the contents for you to view.

Credit Crunch

Following concerns from some of our members about the recent credit crunch, please view the notes prepared by our Investment Consultants explaining the current position and its impact on Nationwide Pension Fund - PDF (124KB).

Nationwide Pension Fund Actuarial Valuation Results

Nationwide Pension Fund's latest actuarial valuation has been completed using information as at 31 March 2007.

For more information please view the PDF (26KB)

Nationwide Deposit AVC Change

For details about the transfer of Nationwide’s Deposit AVC business to Prudential please view our PDF (92KB).

As a result of this change, the provider of the Fund’s deposit account will be Prudential rather than Nationwide Building Society. The Trustee board are confident this change will mean members continue to have access to a high quality investment product for their AVC or bonus waiver accounts.

Equitable Life Update

As part of our responsibilities as Trustee of Nationwide Pension Fund, we recently carried out an AVC review. The advice received from our investment advisers suggested that we make our members, currently invested in the Equitable Life With-Profits Fund, aware of the increasing risk of continuing to remain invested in the Fund.

For more information please view the PDF (188KB)

Investment changes

Following an investment strategy review, our range of investments has been widened with a new asset allocation. In diversifying the Nationwide Pension Fund’s assets the aim is to reduce or spread risk, whilst improving overall returns.

One of the newest asset class is infrastructure – with 3 funds with Macquarie, Innisfree and Babcock & Brown. The new managers were all selected by the Trustee because of their strong track record and their expertise in their investment areas.

Infrastructure is a relatively new type of asset class for pension schemes. It is attractive because of the good long-term income streams. The decision to invest in this asset class was to take advantage of this and as a way of diversifying the assets. Up to 10% of the assets (currently £170m) will be invested in infrastructure in the next two years.

The Trustee have also agreed to invest less than 5% in two active currency funds, one with Record and another with Goldman Sachs. The investment changes will continue in 2008 with the mix of asset classes, including the investments in bonds, equities and property also being looked at.

Closure of the CARE section to new entrants

On 1 June 2007, the CARE section of the Nationwide Pension Fund closed to new employees whose employment with Nationwide commenced on or after 1 June 2007. Existing members of the Nationwide Pension Fund (final salary or CARE sections) are unaffected by this decision to close the CARE section. Accrued rights and future pension expectations are unaffected by the closure of the CARE section to new entrants.

Trustee Company

From 1 April 2007 Nationwide Pension Fund switched from an individual trustee basis to a corporate trustee. This will enable the pension fund to operate as a Trustee company and the existing Trustees will become Trustee Directors.

The reasons behind this are as follows:

• investments in property are not straightforward with individual trustees but going forward property will be registered in the name of the corporate trustee and a nominee company.
• legal changes to scheme documents can be more easily administered s signatures will not be required from all of the Trustees.
• most pension schemes with over £1billion of assets already operate with a Trustee company.
• this will keep us consistent with other areas in the Society.

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