Fidelity International, in partnership with impact-focussed fintech company Tumelo, have launched a platform to provide governance and insights for workplace pension clients, trustees, and their advisers.
Dubbed the “Stewardship Hub”, it enables pension scheme clients and trustees to receive details of the stewardship activities of their fund managers.
The platform also displays the vote preferences of pension scheme members on different company issues, from climate change to gender equality, where Tumelo’s shareholder platform is made available to them.
Its creators also said the Hub enables trustees to meet their obligation to produce an implementation statement as part of their annual report, through its inclusion of Pension and Lifetime Savings Association (PLSA) statistics and copies of fund manager policies.
The Hub will be rolled out in phases to Fidelity Master Trust clients, who will be able to provide feedback.
“Tumelo is already well-known in the pensions industry for giving investors a transparent view of the companies they own and a shareholder voice on issues they care about,” said Kim Nash, independent chair of the trustees of the £4.5bn Fidelity Master Trust.
“By working together, Fidelity and Tumelo have been able to take this one step further by creating a bespoke Stewardship Hub, giving trustees the ability to interact with the stewardship approaches of their fund managers and ensuring the prioritisation of member outcomes.”
Hymans urges DB schemes to act quickly on funding gains
Consultancy Hymans Robertson is urging defined benefit (DB) schemes to act quickly to secure recent funding gains.
Alistair Russell-Smith, head of corporate DB, said funding levels were holding up well at the moment, but that the continuing crisis in Ukraine meant there was a significant downside risk in financial markets, potentially leading to an increased risk of funding level falls in the future.
“Corporates in the midst of a triennial valuation, for example with a 31 March 2021 or 31 December 2021 valuation date, should therefore look to finalise valuations as soon as they can and lock in favourable contribution schedules,” he said.
“Likewise corporates should consider de-risking investment strategies, and increasing hedging to lock in recent funding gains, particularly if valuation packages are predicated on scheme funding staying at current levels. We would urge schemes to act quickly to ensure they lock in funding gains, before it’s too late.”
Yesterday the Pension Protection Fund reported that the aggregated funding ratio of DB schemes in its universe had reached a 15-year high.
Hymans’ comments follow news of UK inflation acclerating to reach a new 30-year high of 7% according to the Office for National Statistics.
Tom Burke, actuarial consultant at XPS Pensions Group, said analysis from the consultancy’s DB tracker had found that a 0.5% increase in long-term inflation expectations since July 2021 had added £140bn to UK defined benefit (DB) scheme liabilities.
DC savers’ climate expectations dip
Nearly six in 10 defined contribution (DC) savers want to significantly reduce their pensions’ exposure to fossil fuels, although the number who would divest irrespective of financial returns has dipped by 7%, to 25%, since 2021, according to a survey by Legal & General Investment Management (LGIM).
The asset manager connected this to a rising cost of living. It noted that the proportion of respondents who said they wanted their pension to have a net-zero target regardless of performance fell from 30% in 2021 to 25% this year.
The proportion of respondents who were unaware of the term ‘net zero’ fell from 25% to 17%.
“This research demonstrates the challenges DC savers are facing amidst the complexities of the current economic environment,” said Rita Butler-Jones, co-head of DC at LGIM. “It underlines the role providers have to play in reassuring clients about their savings in volatile times.
“While we are encouraged by the increased appetite for net zero pensions, 2022 has underlined that this really isn’t at any cost. It is clear that savers see their pension’s main purpose as saving for their retirement.”
Regulators warn P&O members against quick decisions
The Financial Conduct Authority (FCA), The Pensions Regulator (TPR) and Money and Pensions Service have urged current and former employees of P&O Ferries not to make any quick decisions about their pension following recent media reports.
In a joint statement, the regulators said they were raising their concerns given the heightened risk of pension transfers following recent redundancies. Last month P&O Ferries fired 800 employees without giving them any notice.
The FCA said it was repeating its guidance to those providing advice on pension transfers that they ought to start from a position that a transfer is unlikely to be in most DB scheme members’ interests.
TPR is in discussions with the trustees of the P&O DB schemes, who have been asked to send to any savers who ask for a cash equivalent transfer value the regulators’ joint letter warning of the risks of transferring.
P&O Ferries has pension assets in the multi-employer Merchant Navy Ratings Pension Fund and also participates in the Merchant Navy Officers Pension Fund.