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'Diversification' normal practice for pension funds

16 January 2008 / by None
'Diversification' normal practice for pension funds

A poll by the National Association of Pension Funds (NAPF) has shown that mixed investment for pension funds is becoming increasingly common.

Figures show that defined benefit pension schemes are now investing in less volatile areas in an attempt to minimise risk to their funds.

Assets in equities are down from 60 per cent in 2006 to 55 per cent, while fixed-interest assets have increased three per cent to 29 per cent.

Joanne Segars, chief executive of the NAPF, said: "With growing scrutiny and pressure on pension scheme trustees to make sure there is a balance between risk and return, the survey shows they are increasingly viewing diversification as normal practice."

On average, funded public sector schemes were found to have more assets invested in equities and less in fixed-interest assets as compared to private sector schemes.

In related news, the recent NAPF annual survey revealed that after a long period fluctuation workplace pension provision is finding a new "equilibrium".

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