Fiduciary management gains ground

Fiduciary management is rapidly gaining ground in the UK, as SEI has reported 11 new clients signing up to its service in the past year.

The schemes which have signed up include AAF-McQuay U.K., J&E Hall International and Draka U.K. Pension Plan. In total, the new schemes accounted for over £765m of assets coming under fiduciary management.

Patrick Disney, managing director of SEI’s institutional group for EMEA, commented: “More pension trustees believe fiduciary management provides significant benefits to both the overall management of the pension as well as the participants.

“Moving forward, we fully expect more trustees to assess the value that fiduciary management can bring to their pension scheme.”

Meanwhile, the trustee of the T&N Retirement Benefit scheme (T&N) has entered into a bulk annuity contract with Legal & General, which allowed the scheme to exit the Pension Protection Fund (PPF) assessment period.

Although T&N has been in the PPF assessment period since 2006, financially it exceeds the threshold below which the PPF would automatically step in. Therefore, the scheme’s trustee looked to wind up the scheme outside the PPF.

However, the scheme will be unable to pay members’ full original pensions.

“I hope it will be possible to apply a small one-off uplift to members’ annual pensions in due course,” said Tim Culverhouse, managing director of Alexander Forbes Trustee Services Limited and sole trustee of the scheme.

Culverhouse continued: “While it is a source of regret that the scheme’s members will receive reduced pensions, most will receive the majority of their original entitlement.

“This is a far better situation than the one we once faced, where many of the scheme members stood to lose a far higher percentage of their pensions.”