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Impact Investing

IPE special report May 2018

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UK roundup: PPF, MNOPF, BlackRock

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Figures from the Pension Protection Fund (PPF) show that the scale of deficits in private sector UK defined benefit (DB) pension schemes has decreased for the second month running, but only very marginally.

The aggregate deficit for 6,057 schemes – calculated on their ability to provide PPF-level benefits – fell by £1bn (€1.4bn) to £241.3bn over May.

The previous month, the schemes’ funding improved by £50bn as the level of deficits fell from £292.6bn to £242.3bn, after a spike in March.

Deficits had been gradually rising throughout the year until the last two months’ improvement, driven mainly by falling UK Gilt yields, with asset increases failing to offset the damage.

In May, aggregate assets in the schemes rose by 0.6% to £1.28trn, outstripping liabilities’ 0.4% rise after yields fell by 1 basis point.

Liabilities for the schemes now stand at £1.52trn.

In other news, Ensign Pensions is to launch a new defined contribution (DC) master trust that will be open to all companies in the maritime sector.

Ensign Pensions is the consulting business owned by the Merchant Navy Officers Pension Fund and Merchant Navy Ratings Pension Fund.

The current DC scheme for the maritime sector, the Merchant Navy Officers Pension Plan (MNOPP), has also agreed to wind up and merge its 1,500 members into the new scheme.

The new Ensign Retirement Plan (ERP) will offer members access to the flexibilities brought in by the government this April, while having minimum required contribution rates above the statutory levels.

The ERP will hand over the day-to-day management and investment to BlackRock, which will also be responsible for providing the DC flexibilities.

Ensign said the fee levels would remain “competitive” and the annual charge for the default investment fund well below the 75-basis-point cap imposed by the UK government.

Andrew Waring, appointed chief executive, said he wanted to the industry-wide fund to become a benchmark for multi-employer DC schemes in the UK.

A consultation over the winding up of the MNOPP with its current employers has begun, with the trustees expected to have completed this by August.

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