Defined contribution (DC) master trust The People’s Pension has dropped Legal & General Investment Management (LGIM) in favour of State Street Global Advisors (SSgA) as its investment platform provider.
The auto-enrolment DC scheme, having been with LGIM since October 2012, said appointing SSgA was necessary due to the UK’s new pension freedoms.
It will now use SSgA for investment-management services, as well as the asset manager’s platform to allow its 1.6m members to select funds.
The People’s Pension offers members fund-selection options but also an ethical option, as well as default funds based on risk tolerance.
SSgA’s platform can be adapted to include other investment managers than itself, which B&CE, owner of the The People’s Pension, said would be reviewed over time.
Patrick Heath-Lay, chief executive at B&CE, said: “We have been working with the trustee board in undertaking a wide-ranging review of investment and at-retirement options.
“We have some exciting plans for the future, and the move is the first step in bringing those plans to life.”
In other news, Aon Hewitt has urged UK pension schemes to tread lightly when updating mortality assumptions based on increasing death rates in the UK.
The consultancy said official UK statistics data showed 2015 had been heavy for mortality compared with a year earlier.
However, Aon Hewitt said this needed to be treated carefully.
The Continuous Mortality Investigation (CMI), part of the Institute and Faculty of Actuaries that conducts research into longevity expectations, updated its projections based on figures from the Office for National Statistics (ONS).
Aon Hewitt said schemes should treat the revised CMI with caution and remain focused on longer-term trends.
Martin Lowes, a partner at the consultancy, said the ONS data showed that mortality was higher in the previous three years leading up to 2015 compared with the expected long-term trend.
Pension funds, however, need to consider how much weight to put on recent fluctuations, he said.
“[Schemes] should not allow their projections to over-react to annual changes in the numbers of deaths, as these may be caused by one-off factors rather than being part of a long-term trend,” he said.
“Life expectancy is still increasing, just perhaps not quite so rapidly as before. We will need to see what happens to mortality rates over the next few years to help us judge the extent of this slowdown.”