The Royal Mail Pension Plan (RMPP) has selected BlackRock to manage its £8.8bn (€9.9bn) pension scheme assets as an outsourced chief investment officer (OCIO).
Members of RMPP’s investment team will move to BlackRock and continue to manage the scheme’s investments, while benefitting from the scale execution and risk management capabilities of a full-service asset manager, and supported by its expertise and technology resources, it was announced.
Richard Law-Deeks, chief executive officer of the pension plan, said: “As ever, the trustee’s main priority is to ensure the retirement benefits of our members are well managed and protected. Our in-house team has delivered strong investment performance during some challenging markets over the last 20-plus years, meaning we are well funded.
“It is now time to consider how to lock in the stability and continuity of this position. With this agreement, we ensure that key institutional knowledge is retained, while benefitting from BlackRock’s wider expertise and scale. We have long worked with BlackRock and look forward now to deepening that partnership further.”
Sarah Melvin, head of BlackRock’s UK business, said: “The scheme has been run exceptionally well by the in-house team to date and we’re excited to welcome them to BlackRock to continue to serve the plan’s evolving needs.”
The transfer of staff and assets completed on 1 February.
Morrisons retirement plan in £762m buy-in deal
The 1967 Section of the Morrisons Retirement Saver Plan has completed a £762m buy-in with Rothesay, a specialist pensions insurer.
The transaction secures the benefits for all uninsured members of the plan – which is sponsored by Wm Morrison Supermarket – to include the defined benefit liabilities of 2,650 pensioners and dependants and a further 5,483 deferred members. The move follows a previous transaction.
This buy-in, which required no contribution from Morrisons, was achieved through an accelerated process supported by the plan’s readiness as it came to market, helping the trustee and company lock in security for members quickly when the opportunity arose, Rothesay stated.
The policy was also structured to accommodate the plan’s illiquid asset run-off, it added.
The lead broker on the transaction was Aon, acting for the plan on behalf of both the trustee and the company. Legal advice was provided to the plan by Clifford Chance and to Rothesay by DLA.
Steve Southern, chair of trustees, said: “We worked hard with the company and our advisers to enter the market in a position to act quickly and I am very pleased that Rothesay was able to match our ambition, executing quickly and providing certainty over pricing and asset run off.”
Róisín O’Shea, business development at Rothesay, said: “It is a testament to the high-quality preparation by the plan and its advisers that we were able to execute this transaction with an accelerated process. The demand for de-risking is the strongest we have ever seen and our significant capital surplus, combined with our ability to operate at speed while delivering bespoke solutions, means we are very well-placed to help schemes provide pension security for their members in this very busy market.”
Only one in 20 pension schemes able to provide dashboard data to members
With fewer than 150 working days left until the first pensions dashboard connection deadline, a poll by WTW showed that many pension schemes are still anticipating difficulties in meeting the challenges of their dashboard launch.
The poll of 100 pension scheme trustees and in-house pensions managers showed that, while three-quarters (76%) of schemes are confident they will be compliant with their dashboard duties in time for their connection deadline, only 5% are expecting to be able to provide pensions value data for all members at launch.
The same poll showed that around half (46%) of schemes expect value data to be available for up to 90% of members, and a fifth (21%) of schemes don’t yet know what level of member coverage they will be able to achieve.
The poll also revealed anxiety around how pension schemes will cope with the increase in member enquiries anticipated once dashboards have launched. Less than half (48%) of those surveyed were confident that their scheme would be able to manage the increase in enquiries, while over a third (35%) anticipate that their scheme will have difficulty coping with the higher volume.
Geraldine Brassett, director, outsourcing (pension solutions), at WTW, said: “Pension schemes know there is still a lot of work to do to prepare for the launch of dashboards, but there are steps they can take to minimise disruption and increase success for members.
“Understanding a scheme’s design and the quality of its data is key, as most of the challenges and enquiries that schemes will face will be data related. Most schemes can expect an ‘80:20’ experience of implementation, where roughly 80% of members will be straightforward to onboard, but around 20% are likely to be more complex. This may be due to legacy issues such as equalisation or underpins, or be at a member level, including one-off benefit promises, late retirement terms or pension sharing orders.
“Understanding these different considerations at scheme, category, section, or member level is key to ensuring data is correctly configured for members and that they see the right information when they log in to a dashboard.”
Brassett noted that pensions data can be imperfect “but the actions we take now to understand and resolve data issues will help to give members the confidence in dashboards”.
She urged all pension schemes to work closely with their administrators and providers to help iron out their data challenges in advance of dashboards becoming available to members.