Seminar on "Challenges and Opportunities for Pension Funds" 

Seminar on "Challenges and Opportunities for Pension Funds" organized by BankMuscat and William Mercer on 7th April 2002.

The Chairman of the bank Sheikh AbdulMalik bin Abdullah Al Khalil said that Oman has been on of the first few countries in the GCC to realise the significance of pension for its citizens and under the wise guidance of His Majesty has set up a number of pension funds catering to the different segments of the economy. He felt that it is essential to have a strong and well-managed pension fund system for the future welfare of the citizens.

H.E.Juma bin Ali Al Juma, Minister of Manpower appreciated the initiatives taken by the BankMuscat to organize the seminar. The minister said that having a well managed pension scheme was a priority for any country and also for the Government of Oman. He added that Pension funds play a very important role development of capital markets. He mentioned that countries like the USA have created large and self-sufficient institutions that are a role model. He felt that Oman could learn from the experience of these countries to create suitable regulations and also manage the funds in such a way as to provide adequate returns to meet the pension commitments.

Mr. Abdul Razak Ali Issa Chief Executive of BankMuscat explained that BankMuscat and William M. Mercer have signed a Memorandum of Agreement to provide advisory and consulting services to pension funds in Oman. He said that "Through our association with Mercer, local pension funds will have access to a comprehensive consulting and management service, including the expertise of the world’s leading pension and investment consultancy".

Mr. Simon Brimblecombe explained the experience of William Mercer in advising Governments in various countries on regulatory reforms and also Pension funds on various issues such as investment advisory, actuary, asset liability management etc. He said that regulations should be effective, simple, unambiguous, flexible and easy to monitor for compliance. He said that world over major changes are happening to state pension schemes and many countries are encouraging voluntary and non-state i.e. private sector pension schemes. The main factors impacting pension reforms are demographic, ideological and fiscal pressures.

Mr. Camron Hannah explained the importance of Asset Liability management for pension funds. He said that determination of the liability through actuarial valuation was the first step to Asset Liability Management process. Based on this a long term allocation to various classes of assets (equities, bonds, and other assets) should be made.

Shaikh Saleh bin Nasser Al-Araimi, General manager of PASI explained the challenges facing the pension fund industry in Oman, such as Economic and Socio cultural changes. He felt that in pension fund industry it is always better to have reforms interventions early in the stage of pension funds.

Saleh Al-Habsi, Director ministry of Defence pension Fund explained the opportunities for investments for pension funds in Oman. He stressed on the importance of asset allocation and the investment process.

Mr. K. Gopakumar, Assistant General Manager (Treasury & investments) of BankMuscat explained the services to the provide by BankMuscat and William Mercer. He said that this was the first time that such a comprehensive service was being structured for Pension funds in Oman.

William Mercer has 245 offices in 39 countries and employs over 13,000 consultants and support staff. In 2001 it has gained a number of awards including two Global Pension Awards - European Pensions & Benefits Consultants and European Pension Plan Administrator of the Year - and two Professional Pensions Award  - UK Investment Consultancy and Pensions & benefits Consultancy of the year. Mercer was also named "top consultant" in the UK Financial News Poll.

Mercer is part of MMC, a global professional services firm with annual revenues of $10 billion. MMC is the parent company of Marsh, the world’s leading risk and insurance services firm; Putnam investments, one of the largest investment management companies in the United States; and Mercer Consulting Group, a major global provider of consulting services. Approximately 57,000 employees provide analysis, advice and transactional capabilities to clients in over 100 countries. Its stock (ticket symbol: MMC) is listed on the New York, Chicago, Pacific and London stock exchanges.

BankMuscat has an asset base of RO 1.34b (US$ 3.5b), 1,500 employees and a network of 93 branches. The bank is a pioneer in investment banking services in Oman. The investment banking division provides a range of services including brokerage corporate advisory services and asset management. The bank has around US$100m of assets under management and this is a focus area for the bank.