Consultancy Isio has been appointed to act as actuarial adviser to the trustee of the Leonardo Helicopters Pension Scheme, following a competitive process.

Isio’s partner Robert Watkin, who has more than 20 years of actuarial experience, will act as scheme actuary for the aerospace company whose long-established pension fund – formerly known as AgustaWestland UK Pension Scheme – has assets of £1.8bn and approximately 5,000 members.

Martin Flavell, chair of trustees at the fund, said: “As trustees we endeavour to provide excellent outcomes for our members. A key part of this is partnering with advisers who seek to promote innovative and effective solutions in a cost-efficient way.”

Watkin added: “As a challenger consultancy we bring fresh thinking and enthusiasm to the table.  We look forward to working with the trustee and Leonardo to drive forward the strategic journey for the scheme and deliver better outcomes for the scheme’s members.”

DB pension trustees focus on illiquid assets when targeting bulk purchase annuities

Improvements in UK pension funds’ funding levels have accelerated the need for many defined benefit (DB) pension trustees to consider the illiquid assets in their schemes, according to research from Standard Life.

The focus on illiquid assets comes as many schemes have experienced significant improvements in funding levels prompting them to review their end-game strategies sooner than expected, the firm stated.

Kunal Sood, managing director of defined benefit solutions and reinsurance at Standard Life, said: “Against the current backdrop of improved funding levels, we are seeing an increasing number of schemes with a significant portion of illiquid assets looking to engage in de-risking activity. Illiquid assets have the potential to offer diversification benefits to schemes and often come with predictable cash flows but they are more challenging for insurers to accept given the regulatory framework around the assets that can be used to back BPA [bulk purchase annuity] deals.”

Illiquid assets have historically been viewed as a barrier to de-risking activity as they are more difficult for insurers to accept. Standard Life’s research found that 40% of trustees said recent changes in the market environment have prompted them to reduce their schemes’ allocation to illiquid assets as a priority.

A further 40% confirmed it has made them realise the importance of consistently reviewing the liquidity and marketability of their schemes’ assets, while a further quarter (26%) said this has prompted them to start engaging with an insurer earlier than expected about the best ways to manage their illiquid assets.

Various options are being considered by trustees when it comes to managing any illiquid assets held by the scheme. Two thirds (62%) are considering passing the assets to insurers in-specie, while a third (36%) are considering using a secondary market sale.

A third (34%) are considering deferring part of the BPA premium, giving them time for the illiquid assets to redeem, or more time to sell the assets, at which point the premium can be fully paid up.

Out of all the DB pension trustees surveyed, 100% are considering the options available to them as part of their journey to buy-out plan to manage any illiquid assets, Standard Life’s research found.

Sood said: “Insurers are looking to support schemes in managing their illiquid assets in new and innovative ways to ensure schemes are able to make the most of the assets, while enabling trustees to harness the opportunities the current market has to offer.”

He added, however, that whilst many illiquid assets aren’t desirable for insurers, there are buyers who are seeking these types of assets. “A secondary market sale could be a good option for some schemes, whereby an auction process is run by a broker with the aim to sell the assets to a potential buyer.”

“What is important to note is that each scheme will have different needs, which underlines the importance of tailored, bespoke approaches to achieving the best outcomes when it comes to managing any illiquid holdings,” he said.

Pension industry urged to take greater responsibility to reach LGBTQIA+ community

The pension industry has been urged to take greater responsibility to reach members of the LGBTQIA+ community and support them to achieve the retirement lifestyle they want, as research from Scottish Widows shows almost half of the individuals who identify as LGBTQIA+ are on track for a retirement lifestyle that the Pensions and Lifetime Savings Association (PLSA) defines as less than the minimum required to afford basics such as food and heating.

This contrasts with the national average of 35% of people who will face similar struggles, the report noted. It also highlighted that a third, or 36%, of LGBTQIA+ people are not a member of any pension scheme at all, compared to 30% of the wider population.

According to Scottish Widows, this issue is exacerbated by the 18% who have reduced their contributions to pensions and similar schemes because of rising living costs (versus 12% of the wider population).

Emma Watkins, managing director of retirement and longstanding at Scottish Widows, said:“There are major issues around retirement planning across the UK, but it’s particularly acute for the LGBTQIA+ community.

”The fact that one in five LGBTQIA+ people have felt the need to reduce pension contributions is a huge area of concern. It points to the wider inequalities they face when trying to save for retirement.”

Watsins pointed out that members of LGBTQIA+ community in the UK make an average of around £7,000 per annum less than than their heterosexual counterparts, directly impacting their ability to save as much.

She said: “Broadly speaking, earning less means saving less.”

Watkins added that on top of this, LGBTQIA+ people also suffer a “far higher” rate of mental health conditions – 34% compared to 8% of the general population – making them more likely to need time out of work and “therefore reducing their opportunities for pensions contributions”.

Watkins continued: “Employers and the pensions industry must take greater responsibility to reach members of the LGBTQIA+ community and support them to achieve the retirement lifestyle they want. It isn’t enough to help them overcome these hurdles – we must remove the obstacles altogether.”

The latest digital edition of IPE’s magazine is now available