mast image

Special Report

Impact investing

Sections

UK roundup: Royal Mail Pension Plan, Aon Hewitt, Sun Chemical

Related images

  • UK roundup: Royal Mail Pension Plan, Aon Hewitt, Sun Chemical

Related Categories

UK - Parliament has approved a bill that will see the state shoulder the burden of Royal Mail's £8.4bn (€9.3bn) pension deficit, as legislation to privatise the institution gathers pace.

The Postal Services bill, officially announced in the Queen's Speech last year, will see the government create a new pension scheme, separating the Royal Mail Pension Plan (RMPP) from the company in an effort to make it more attractive to private investors.

Royal Mail would then be left with a smaller, fully funded scheme, while the government addressed any liabilities.

Additionally, the bill will allow for the mutualisation of the Post Office, as well as guaranteeing that 10% of shares in the Royal Mail will be held by its employees.

Business secretary Vince Cable said he was delighted the bill had moved through the Commons so swiftly.

It is now being debated in the House of Lords before it can pass into law.

Cable added: "On taking office, the government realised it had to move swiftly to tackle the challenges facing Royal Mail and the Post Office to ensure the future of the important services they both provide. We're absolutely determined to secure the future of these two proud institutions."

RMPP has seen its deficit steadily increase over the years, rising from £3.4bn to £10.3bn between 2006 and 2009. However, on the back of strong returns of 22% last year, it fell to £8.4bn.

The scheme had previously announced plans to increase deficit reduction payments from its current level of £282m a year to address the issue. 

The size of the deficit, as well as the scheme's investment strategy, has been a cause for much debate, with critics branding it a hedge fund delivering letters due to a percieved overexposure to the futures market.

In other news, Aon Hewitt has been appointed pension administrator and actuarial consultant for the Sun Chemical Limited Pension Scheme.

Sun Chemical has closed the £250m scheme to new entrants, but still links any future accrual of its members to salary increases.

Stuart Heatley, managing director of benefits administration for the UK and EMEA at Aon Hewitt, said: "Given the frozen nature of the plan and their objectives in the future, the trustees were keen to explore new options to improve on their previous structure and to gain new efficiencies."

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2548

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 300-400m.
    Closing date: 2019-07-30.

  • QN-2549

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 300-700m.
    Closing date: 2019-07-30.

  • QN-2550

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2551

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2552

    Asset class: Fixed Income, High Yield (Active).
    Asset region: High Yield (US).
    Size: CHF 500-600m.
    Closing date: 2019-07-29.

  • QN-2553

    Asset class: Fixed Income, High Yield (Passive or Passive Enhanced).
    Asset region: High Yield (US).
    Size: CHF 500-1'100m.
    Closing date: 2019-07-29.

  • QN-2554

    Asset class: Global Real Estate (Equity, unlisted Funds).
    Asset region: World (ex-Switzerland).
    Size: CHF 200 mn (potential for further growth).
    Closing date: 2019-08-07.

  • QN-2555

    Asset class: Real Estate.
    Asset region: European.
    Size: EUR 50 - 100 million.
    Closing date: 2019-07-22.

  • QN-2556

    Asset class: FX Hedging.
    Asset region: Global.
    Size: Mandate size of CHF 1.5 bn.
    Closing date: 2019-08-09.

  • QN-2557

    Asset class: All/large Cap Equities.
    Asset region: China A-shares.
    Size: Unit linked platform (0m USD in initial investment).
    Closing date: 2019-08-01.

Begin Your Search Here
<