The research arm of NEST master trust will be testing the impact of an opt-out joining mechanism for workplace emergency saving following low sign-up levels during its sidecar savings trial.

In the new NEST Insight trial, employees will be given the choice to opt-out of payroll saving at any time. If they don’t opt out, they will automatically start saving a default amount into an accessible emergency savings account each time they are paid, without having to do anything themselves to set this up.

NEST has been trialling the savings sidecar arrangement since 2019, where participating individuals pay their pension contribution but some of it is diverted.

According to NEST Insight, early indications are that support for workplace emergency saving is high among both employers and employees, but 98% of people who say they think the savings tool will help them have not yet signed up.

The planned opt-out trials follow expanded support from BlackRock and the Money and Pensions Service for NEST Insight’s research programme.

Will Sandbrook, executive director of Nest Insight, said: “We’re really excited about the next phase of this research, which, alongside what we’re learning from the ongoing sidecar savings trial, should make a real contribution to our understanding of what works in facilitating short-term saving and how that can support longer-term financial security.”

British American Tobacco fund insures £400m of additional liabilities

The trustee of the British American Tobacco UK Pension Fund has concluded a £400m (€470m) buy-in with Pension Insurance Corporation (PIC), its second such agreement with the specialist insurer.

Three-quarters of the liabilities insured in this latest transaction relate to non-pensioners. The terms for it were pre-agreed alongside the pension fund’s first buy-in with PIC, a £3.4bn deal in May 2019.

Yadu Dashora, partner at LCP and lead adviser to the trustee on this and the previous £3.4bn transaction, said the forward planning allowed the pension fund to secure attractive pricing for some of its remaining long-dated non-pensioner liabilities.

Claire Petheram, Linklaters’ global head of pensions, said: “By ensuring that the initial transaction anticipated this second transaction, the trustee addressed, up front, potential issues associated with the alignment of key terms and timescales. “This foresight meant documents could be ‘fast tracked’, with the second transaction being concluded within the preferred commercial timeframe.”

Graeme Munro, chairman of the pension fund, said PIC’s “commitment to excellent customer service” since the first transaction had been an important factor in the decision to transact with the insurer again.

Linklaters provided legal advice to the trustee and Hymans Robertson is the scheme actuary. PIC was advised by Herbert Smith Freehills. Mercer and Travers Smith acted as advisers to British American Tobacco.

British American Tobacco UK Pension Fund has total liabilities of £4.1bn with over 10,000 members.

R&M keeps almost 90% of fiduciary AUM since CMA retendering

River and Mercantile retained nearly 90% of fiduciary management assets since the beginning of retendering to comply with requirements following the Competition and Markets Authority (CMA) review into investment consulting and fiduciary management, according to results released by the business today.

Under rules effective December 2019, pension schemes that appointed a fiduciary manager without a competitive tender process for more than 20% of scheme assets had until 9 June to run a review.

River and Mercantile said it had “fared well in an unprecedented period for the fiduciary industry”, also reporting £1.2bn of new fiduciary wins during the year.

It said that the retendering process for some of its competitors had not yet ended, “which provides further opportunity to increase market share as well as continuing to win a growing share of new fiduciary mandates as the underlying market continues to grow with pension fund consolidation”.

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