Day Five: PensionsAsia 2002 Awards for Achievement
Communications Award: small plan (under HK$100 million in assets)
PWM Environmental Services
“Being in the waste management business, a large percentage of our employees is far from what may be considered sophisticated investors,” says PWM. A lot of companies say people are their biggest asset, but PWM means it, which with the advent of MPF has just changed its MPF-exempt ORSO scheme to allow for member choice.
What impressed us is the dedication of the company’s senior management to ensuring the employees had a good understanding of their retirement benefits and obligations. “As most of our employees are operators who are not exposed to modern communication technologies, we feel it inappropriate to use computer and intranet or internet as the major means of communication,” says the company, instead putting a premium on face-to-face discussion with its 600 employees at sites throughout Hong Kong involving not just the human resources department but also top managers. Employees are strongly encouraged to attend these meetings – often held at strange hours because operations often run nightshifts – and attendance has been up to 85%. PWM also relies heavily on its consultant, William M Mercer, and on its service provider, Invesco.
Communications Award: large plan (HK$100 million or more in assets)
Television Broadcasts (TVB)
TVB has had a corporate pension scheme for its 3,500 employees since 1971, and with the launch of MPF transferred all assets to the MPF plan of its master trustee, Bank Consortium. “We strongly believe that it is also our role to work with the trustee to ensure that our fellow colleagues are being kept informed about their MPF account and related issues,” says the company.
For example, briefing sessions during MPF’s launch were tailored to individual staff. In the wake of September 11th, special arrangements were made for staff wishing to switch funds. TVB also continues to survey its employees about MPF and retirement scheme issues.
By using Bank Consortium as its trustee, it gets easy access to a member bank (Shanghai Commercial Bank) located in TV City in Kowloon, where most TVB employees also work. This includes a bank financial planner dedicated to TVB staff’s retirement needs.
The company realizes that retirement service communications don’t end with the launch of MPF, saying its future goal is to reinforce the message that MPF is not an actively traded stock market game but “a protection plan aiming at providing financial benefits for members upon their retirement”.
Fund Administration
Bank of Bermuda
Bank of Bermuda comes out tops for its depth of coverage and long-term commitment to the business. Although it lacks the reach of local rivals such as HSBC in smaller markets such as Malaysia or India, Bermuda administers some of the region’s biggest accounts, including 50% of all onshore and offshore funds in Singapore and 55% of constituent funds and APIF monies connected to the Mandatory Provident Scheme in Hong Kong. Nearly 75% of the assets it administers are contained in client-sponsored pooled investment products including mutual funds, custody, unit trusts, pension plans, fund of funds and private client investment portfolios. More recently the bank has made a big splash in Asia’s burgeoning hedge fund market.
One blue chip customer which has used the bank since 1995 says, “We conducted a thorough assessment of all service providers in the market and found that the core strengths that first led us to Bank of Bermuda were still in place.”
Another customer avers, “In the volatile labour markets in Asia, Bermuda Trust has retained its key staff and continues to deliver accurate and timely services.”
Prime Brokerage
Goldman Sachs
In simple volume terms, Goldman is streets ahead of its competitors in the markets that count, claiming a 68% market share of all hedge funds operating in the region, and 90% of Japan’s market. In the past year, the bank has doubled the number of locally based clients on its books from 20 to 40. This brings the total number of clients it services to 67 when including those Asian hedge funds managed from New York and London.
Goldman Sachs is strongest in Japan and Australia and the bank’s executives acknowledge that it was slower than its rivals in setting up in other Asian markets. But the bank has been working hard to rectify this. By far its biggest ace is an unparalleled stockpile of securities that can be lent to hedge fund clients. This pool has been significantly enhanced in Japan where the bank has signed 10 exclusive lending contracts with portfolio managers giving it access to more than $10 billion in lendable securities.
Securities Lending
State Street
In a year which has seen a record number of the region’s central banks and portfolio managers put their assets into stock lending programs, State Street has picked up many of these accounts providing lenders with a safe, reliable source of additional income to their portfolios. The bank has a lendable asset base of between $40 and $50 billion in Asia and an average loan balance of around $10 billion. It handles large fixed-income securities portfolios for central banks in China, Hong Kong and Singapore, while in Japan the bank acts as agent for treasury and sovereign securities held by the country’s life and general insurance companies.
State Street’s edge comes from its inventory management and control system that operates on a single worldwide platform, giving borrowers real-time access to its global book of assets in all time zones. In its reporting State Street encourages clients to focus on the risk-adjusted return of their portfolios – returns that are enhanced by the bank’s collateral management and risk management capabilities.
Awards are based on a combination of data supplied by Bank of Bermuda, Eureka Hedge Advisors, Watson Wyatt and William M Mercer; by applications from nominees; and by the judgement of PensionsAsia’s editorial team. Decisions are solely those of PensionsAsia and are final.