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‘Systems error’ that lead to £6m pensions boon
Windfall linked to rising dollar value
A MONUMENTAL mistake by banking giants Goldman Sachs has resulted in a £6million windfall for Islington Council’s Pensions fund.
Goldman Sachs is supposed to “hedge” a proportion of pensions investments to help minimise any losses to the council with the fluctuation of the US dollar.
Last year, the account was left unhedged, leaving the account dangerously exposed to any changes in currency value. But the dollar’s value rose, claiming a £6m profit for the pensions fund.
News of the windfall – reported in the industry’s paper Financial News – was confirmed in the minutes of last week’s Town Hall pensions committee meeting, which put the windfall down to a “systems error”.
John Belgrove, of investment consultant Hewitt Associates, said: “Mistakes happen and it is usually due to human error, but they do not usually fall butter side up like this one.”
Town Hall finance chief councillor John Gilbert said: “The £6m was a windfall, which was made because they didn’t have a hedge in place for a period when the currencies moved in our favour.
• BRITAIN’S biggest pensioner organisation has selected a 74-year-old Islington woman to be its first ever female general secretary. Dot Gibson won 63 per cent of the vote at the National Pensioner’s Convention’s conference in Coventry this week. |
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