Arjo UK Pension Scheme has selected Kempen Capital Management UK for a fiduciary management mandate for its defined benefit pension scheme.

The scheme trustees appointed Kempen’s fiduciary management team following a competitive tendering process which ran from the end of November 2020 into April 2021, and was overseen by Kevin Humpherson at Deloitte, it was announced.

The mandate contributes to Kempen’s total client assets under management which stood at €88.3bn as at 30 June 2021.

The fiduciary management contract calls for Kempen to work with the trustees to implement a collaborative investment strategy and work to achieve the scheme’s and sponsoring employers’ funding objectives and journey to full funding.

Bob Lock, chair of trustees for the scheme, said: “We liked Kempen’s investment strategy as it best fitted our flight plan and focused on investing in more longer-term funds.”

He said that the Kempen team had been “very open and proactive throughout the tender process, which has continued during the transition of our assets”.

Kempen was selected after a number of meetings over a six-month process in which high scores were achieved on all selection criteria, Lock added.

Andre Keijsers, managing director at Kempen UK, said he was “acutely aware of the broader landscape of evolving UK pension schemes, and the deep responsibilities involved”.

Kempen’s latest fiduciary management mandate wins include a £570m (€666m) contract with the UK defined benefit scheme for international energy company Uniper and another from Clara-Pensions to implement a low risk investment strategy targeting a secure journey to an insured buy-out.

Link Group Retirement Solutions is launching a ‘digital-first’ solution for the defined contribution (DC) pension fund and master trust administration markets that will drive down costs.

Link Group said the front-to-back office solution will aim to modernise the market by “combining highly automated, cost efficient, scaled processes with advanced data analytics and platform capabilities”.

This would take away the complexity of back-office admin, which means that by having a fully automated back office, providers can focus on member engagement.

Link Group – which claims to be the largest provider of services in Australia’s superannuation administration industry – currently supports close to one million members in the UK, and has plans to further expand this over the next financial year.

Richard Wilson, general manager for Link Group’s UK retirement solutions business, said: “Link Group has been at the heart of modernising the superannuation (pensions) industry in Australia and we are delighted to now bring this expertise, technology and solutions capability to the UK.”

He said the UK pension market continues to see significant change and consolidation at multiple levels and bears many characteristics and similarities to the Australian market.

“The pensions administration market in the UK has been under-invested which has eroded margin and the ability for companies to invest in solutions that really engage people in saving for their retirement. We want to change all that,” he added.

Regulator calls for new default option to improve non-workplace pensions

The UK’s Financial Conduct Authority has published proposals to improve outcomes for non-workplace pensions by suggesting that companies offer a new default investment option.

Currently non-workplace pension customers in the UK have to choose their own investments from an increasingly wide range of options.

This complexity can make it hard for some customers who do not take advice to choose investments that meet their retirement needs, the regulator said.

The paper – CP21/32: Improving outcomes in non-workplace pensions – proposes that the default option would need to be an appropriately diversified basket of investments and take account of climate change and other ESG risks, it added.

As a customer approaches retirement, FCA said, their investments would be changed to lessen the impact of any market downturn on their savings.

Sarah Pritchard, the FCA’s executive director for markets, said: “These proposals will ensure that customers who don’t take financial advice can benefit from a professionally designed investment strategy, and reduce the risk of their retirement income being eroded by inflation.”

She noted that the proposals form part of the FCA’s wider work on pensions which is “designed to ensure that customers are better supported throughout their pension journey”.

Phil Brown, director of policy at B&CE, provider of The People’s Pension, said that “it’s not a surprise that the FCA is considering tougher regulation, including the formal introduction of default funds for non-advised customers buying non-workplace pensions.”

He added: “Pseudo-defaults exist in the market right now, so regulation is appropriate. It’s disappointing, though, that the paper falls short of proposing an extension of Independent Governance Committees (IGCs) and a charge cap for non-workplace pension default funds.”

He said that a lesson learnt from automatic enrolment is that default funds need independent governance.

“It’s odd that the same default fund offered by a workplace pension would benefit from tougher consumer protection than an identical fund sold in a retail product,” he noted.

The FCA is inviting responses to its proposed rules from today until 18 February 2022, when the consultation will close.

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