The Hospital Authority in Hong Kong is preparing to send requests for proposals (RFPs) to investment consultants to assist it with a review of its fixed income and currency strategy for its $2.5 billion MPF-exempt ORSO pension scheme.
Winnie Pao, director of investment supervision, says the programme has been transformed to a members' choice scheme as of 1 October. Before, although the plan has always been defined-contribution, the Authority offered only one fund to the approximately 39,000 members. The pension fund's trustees felt that a members' choice was required in part because older members were concerned about a high equities exposure as they neared retirement.
She made her remarks in an interview with AsianInvestor magazine. The full details will be available in the upcoming October/November issue.
The Authority has introduced four lifestyle funds of varying risk, and employed Invesco as the members' choice service platform provider; i.e. the interface. Invesco is also the service provider to the Authority's separate MPF scheme.
As a result, more assets are being allocated to fixed-income managers, and the Authority is taking a closer look at its fixed-income and currency structure. It currently has four fixed-income specialist mandates, with exposures ranging from vanilla sovereign to US high-yield, and it also uses Pareto Partners as its currency overlay manager.
Pao says the Authority needs to consider whether it must adjust its benchmarks, now that it has four funds, not one; and its hedging strategy. It needs a consultant's advice, and will be contacting Mercer Investment Consulting, Russell Investment Group and Watson Wyatt.