The Rolls-Royce Retirement Savings Trust has selected BlackRock to build a bespoke default Target Date Fund (TDF), which will help deliver retirement benefits to the fund’s 34,000 members.

“Improving retirement outcomes and ensuring a seamless member experience are at the heart of this partnership,” BlackRock announced.

The Rolls-Royce TDF solution, tailored exclusively for the scheme, will focus on growing members’ retirement benefits before gradually shifting from higher to lower-risk investments, as members approach their retirement date, it added.

The solution’s custom design is also centred around member-simplicity, with members only having to set a realistic retirement age and, when that date is reached, either take their retirement savings, or change their retirement age to a date in the future.

The investment mix, in funds managed by BlackRock, is dynamically adjusted to achieve attractive risk-adjusted returns throughout the members’ journey to retirement, the asset management firm explained.

Fiona Brown, group head of pensions at Rolls-Royce, said Aviva and Mercer also worked closely with the fund’s trustees helping to design the default option.

LPP invests in Federated Hermes’ private equity fund

Local Pensions Partnership, along with several other investors such as Hostplus and Samsung Life Insurance, have invested in Federated Hermes’ private equity fund, Private Equity Co-investment Fund V.

The asset manager said it had raised $486m for the fund since it launched in December 2021. It had an initial fundraising target of $400m.

The fund’s global forward-looking, thematic strategy targets companies operating in sectors set to benefit from long-term trends that are reshaping global economic activity, Federated Hermes said.

Additionally, the strategy places emphasis on portfolio construction, with the objective of delivering strong and sustainable returns, irrespective of what happens on the global stage, it added.

The fund has already committed to 23 investments with a further seven investment commitments approved, as of today, Federated Hermes disclosed.

GAD completes methodology assessment into British Steel Pension Scheme

Specialists at the Government Actuary’s Department (GAD) have undertaken a quality assurance exercise of methodology in a report related to the British Steel Pension Scheme (BSPS).

When the BSPS was restructured in 2017, members were offered two options:

  • move to a new scheme on the same benefits but with lower future increases; or
  • remain in the BSPS and receive a reduced pension from the Pension Protection Fund (PPF).

Members who stayed in the BSPS will now have benefits insured outside the PPF that will result in an uplift on the PPF benefits, the GAD disclosed.

Other members transferred to a defined contribution pension scheme. People who received non-compliant pension transfer advice suffered a financial loss as a result, the department disclosed.

The Financial Conduct Authority (FCA) published policy statements and set out rules for a redress scheme for these members.

It built a calculator that firms must use to assess the loss that members are owed under the redress scheme. It also prepared a technical report describing the calculation methodology.

The FCA commissioned the GAD to review this technical report. The department said: “We were asked to confirm the methodology was consistent with the policy statements and benefit structures set out in the BSPS rules.”

The GAD has confirmed that the technical report appropriately reflects the FCA’s guidance and the features of the BSPS arrangements.

Actuary Mark Shaw led on the technical report. He said: “GAD’s work has provided reassurance to both the FCA and former BSPS members. The redress calculator can be relied on to calculate the redress for former members, in accordance with the FCA’s policy statements.”

London-based Osmosis partners with SuMi TRUST

Osmosis, a London-based asset management boutique, has entered into a strategic partnership with Japanese asset manager SuMi TRUST, which holds $645bn in assets.

The move is aimed at further enhancing both firms’ sustainability offerings, it was announced. The partnership will allow SuMi TRUST and Osmosis to collaboratively develop new products, strategies and research methodologies.

The terms of the partnership also include a non-binding agreement for SuMi TRUST to acquire a minority stake in Osmosis, it was disclosed.

Ben Dear, chief executive officer of Osmosis, said: “Working with SuMi TRUST will allow us to promote our unique investment approach, which targets better risk-adjusted returns whilst significantly reducing use of carbon and water and waste production.”

Yoshio Hishida, CEO of SuMi TRUST, added that by combining Osmosis’s investment strategy with SuMi TRUST’s investment management skills, the firm will deliver more advanced strategies to investors whilst directing capital towards businesses with low environmental impacts.

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