Renew, an engineering services group, is looking to accelerate fully buying in its liabilities linked to the Amco defined benefit (DB) scheme after its other DB scheme recently entered into a final risk transfer.
The AIM-listed company today announced that on 26 November, the trustee of the Lovell Pension Scheme, in consultation with Renew’s board, entered into a buy-in with a specialist insurer that eliminated all of Renew’s exposure to investment and funding risks in the scheme.
Coming on top of buy-ins in 2011 and 2016, last month’s buy-in means all of the Lovell scheme liabilities will be matched with corresponding annuities.
In its stock market announcement today, Renew said it had decided to investigate the opportunity of diverting contributions to the Lovell scheme to the Amco scheme, to see if that would enable the latter to fully buy-in its liabilities over a shorter time period than previously envisaged.
It said that based on current estimates, the directors believed diverting the equivalent of one year’s worth of contributions from the Lovell scheme into the Amco pension scheme was likely to be enough to achieve a buy-in of the remaining liabilities.
Neither the name of the insurer nor the size of Lovell’s buy-in were disclosed.
Court of Appeal rejects block of £12bn annuities transfer
The Court of Appeal has overturned a High Court ruling blocking the transfer of a £12bn (€13bn) back book of individual annuity policies from Prudential to Rothesay Life.
Announced yesterday, the judgement means that the High Court will be asked to assess the proposed transfer again and make a new decision about whether it should be allowed to take place.
Prudential, now M&G, said it currently expected that a new hearing would not take place before late 2021.
The Court of Appeal rejected each of the original judge’s objections to the transfer. Michael Abramson, partner at Hymans Robertson, said this would be very well received by the insurance industry “as the original and unprecedented ruling risked stymieing corporate activity”.
“At the same time, the robust process that we have seen in action demonstrates to policyholders, be they pension schemes with buy-ins or individual annuitants, the high level of regulatory and legal oversight in the industry,” he added.
Phoenix sets net-zero target
Phoenix, the UK’s largest long-term savings and retirement business, today announced a commitment to its investment portfolio being carbon neutral by 2050.
It said it would set and pursue a 1.5°C aligned science-based emissions reduction target, with any remaining hard-to-decarbonise emissions compensated using certified GHG removal projects.
The company, which has over £300bn of assets under administration, is also commiting to its operations being net-zero by 2025, taking into account the scope 1 and 2 emissions of its occupied premises and the scope 3 emissions from its business travel.
Earlier this week it launched a new ESG default solution for the pension fund clients of its Standard Life Assurance Business.
Legal & General makes annuity portfolio emissions reduction pledge
Legal & General Retirement (LGR), the insurer’s annuity business, is committing to halving the carbon intensity of its current £80.7bn annuity book by 2030, with an 18.5% reduction by 2025.
The carbon emissions concerned by the commitment are scope 1 and scope 2 emissions. The intensity is based on these emissions per million pound sterling of investment.
The commitment is set out in a new ESG policy from LGR, which is said is the pension risk transfer sector’s “most comprehensive publicly available document outlining a provider’s approach to ESG”.
ESG in the context of LGR’s policy refers to environmental impact, social impact, and governance.
Legal & General is targeting a net-zero portfolio and Legal & General Investment Management, which manages the assets in LGR’s annuity portfolio, is a leader in sustainable investing.
Laura Mason, chief executive officer at LGR Institutional, said: “Climate change is a serious threat, and we recognise that our scale brings a responsibility to take action. I am proud of the ambitious targets we have set […] and am committed to putting this aim at the forefront of our decision-making.
“The insurance sector has an important role to play in using pension money to invest in sustainable projects across the UK, and I hope that our new policy document will highlight how we and others can play our part in tackling climate change”.
Aviva Master Trust default now ‘fully ESG integrated’
Aviva Master Trust has adopted Aviva’s ‘My Future Focus’ investment strategy as its standard default, highlighting that the strategy was fully ESG integrated.
My Future Focus consists of ESG tilted passive and actively managed funds from Aviva Investors’ multi-asset team.
Jon Parker, trustee and chair of the investment sub-committee for the multi-employer DC scheme, said: “As independent trustees of the Aviva Master Trust we are passionate about ESG and focussed on ensuring that we are providing our members with default solutions that deliver strong risk adjusted returns whilst investing responsibly and sustainably in alignment with our ESG beliefs.
“ESG is not just about environmental principles, it’s also about the reduction of investment risk for our master trust scheme members. We believe that over the long-term companies with strong ESG credentials will outperform companies that do not take their ESG responsibilities seriously.”
The ESG integration within ‘My Future Focus’ has been running for 12 months, the master trust said.
In October, Aviva set a 2050 net-zero target for its own auto-enrolment default pension funds.