In early 2000, the trustees of the pension plan in Boots considered a proposal to move 100% of the pension assets in a portfolio of bonds, which will be passively managed. Boots Co. PLC was the leading retailer in cosmetics and toiletries in the United Kingdom, and the company pension scheme was one of the largest in the country, with 2.3 billion British pounds in assets. If implemented, the boots will be much different from its previous strategy of investing pension, which was similar to other large pension funds in the UK. In general, the funds used for external control of active and passive portfolio of approximately 75%, 17% bonds, 4% real estate, and 4% cash. It is an unprecedented change in the investment policy will be closely linked to the pension assets and liabilities and, in accordance with long-standing academic principles of corporate governance of the pension fund, it can also have a significant impact on the boots themselves, their shareholders and other stakeholders. When making a decision, the trustees must consider these effects as well as the feasibility of such a plan. "Hide
by Luis M. Viceira, Akiko M. Mitsui Source: Harvard Business School 18 pages. Publication Date: June 25, 2003. Prod. #: 203105-PDF-ENG
Related Case Solutions & Analyses:
Fritidsresor Under Pressure (C): After the Tsunami
Platform-Mediated Networks: Definitions and Core Concepts
Note on Individual and Corporate Liability
John Smithers at Sigtek
New York City Against AIDS Video
Merck & Co. Inc. (A)
AMB Property Corporation: Navigating Treacherous Waters
ALLIANCE DESIGN CONCEPTS FOREIGN EXCHANGE RISK
Brazos Partners and the Tri-Northern Exit
EVOLUTION
