Royal Mail has transferred its defined contribution (DC) pension scheme, covering £2.45bn (€2.9bn) in assets and 100,000 deferred members, to the L&G master trust.
The transfer is the largest complete transition into a UK DC master trust to date.
The scheme’s trustees selected L&G based on its member experience and administration, investment proposition, value for money and ability to deliver large-scale transitions.
L&G’s Lifetime Advantage Funds (LAF) will serve as the pension fund’s default investment strategy, with a target allocation of 15% to private market investments during the growth phase. The LAF range, which reached £30bn in assets this year, aims to support long-term member outcomes through a diversified mix of public and private market investments.
Elizabeth Hartree, trustee chair of the Royal Mail defined contribution pension, said: “For both the trustees and Royal Mail, we wanted a new home which was well suited to our membership and could readily take on a large population and significant assets.
“It was clear that L&G was that home. Throughout the process, our priority has been to provide a seamless experience for members while enhancing the pension proposition available to them. We look forward to working with L&G to help our members achieve better long-term financial outcomes.”
Jayesh Patel, head of UK DC distribution at L&G, added: “The appointment reflects the trust our clients place in our ability to deliver transitions of this scale, while providing strong value for money and helping members achieve better long-term retirement outcomes. We look forward to working closely with Royal Mail to help members engage with their pension savings and make informed decisions through every stage of their journey to and through retirement.”
