UK roundup: M&S, Hymans, L&G, Avon, Record Currency Management
UK - Retailer Marks & Spencer (M&S) is to replace its existing defined contribution (DC) scheme with a new master trust, as the UK retailer prepares for the introduction of auto-enrolment.
Developed in conjunction with Hymans Robertson and Legal & General (L&G), the master trust will serve as a framework in which several pension schemes can operate, the company said.
The new arrangement - Your M&S Pension Savings Plan - was developed because internal reviews demonstrated a new approach was needed, according to Julie Parker-Welch, reward manager for pensions at the retailer.
"We conducted a thorough consultation with our employees, and we're confident we've now created a scheme that will ensure a smooth transition for our existing members and provide eligible new members with the information they need to make the right pension choices for them," she said.
Selected as provider, L&G will offer all investment options for members. Parker-Welch noted the particular challenges facing the retailer due to the sector's higher than usual employee turnover.
"Though M&S benefits from lower than average employee turnover, it was clear from our review we needed a new pension solution to help us successfully implement the legislation and retain a market leading DC pension scheme," she said.
Hymans Robertson noted that M&S had been proactive in reviewing its arrangement, examining its options in autumn of last year.
Lee Hollingworth, head of DC at Hymans added: "M&S has ensured sufficient time to review its existing arrangements, as well as plan and design a scheme that is right for the business and its employees."
The master trust arrangement allows for several pension schemes to set individual contribution rates and select different investment funds based on member needs, while allowing a single company to act as provider for the arrangement.
Meanwhile, the £1.8bn (€1.9bn) Avon Pension Fund, for Bath and North East Somerset Council, has awarded Record Currency Management a contract to manage an active currency-hedging programme covering the fund's overseas equity assets.
The management firm, which has been selected from 15 candidates after the initial tender last year, was awarded the £10m, five-year tender covering an estimated £500m of the fund's overseas equity exposure to US dollars, Japanese yen and euros.
In the contract award, the pension fund said it had tendered the management of its programme to Record Currency Management, as the candidate was the most economically advantageous in terms of investment philosophy and process, risk management and portfolio construction, corporate structure and resources, fees, client service and performance including risk.
The management of the active currency-hedging programme will not be subcontracted and will be entirely led by Record Currency Management.