People’s Investments Limited appointed primary investment adviser to Trustee of the People’s Pension

The People’s Pension1 today revealed it has appointed People’s Investments Limited2 (PIL) as the primary investment adviser to the Trustee of the People’s Pension Master Trust.  This comes after PIL received authorisation from the Financial Conduct Authority (FCA). 

The UK’s biggest commercial Defined Contribution (DC) pension master trust will now have a dedicated, in-house team producing investment advice and overseeing the assets, built and developed specifically with the needs of the Trustee and members of The People’s Pension in mind.  

 This announcement comes with the growth of the investment team, overseen by Chief Investment Officer Dan Mikulskis. With 23 investment professionals set to be in place by March, Dan’s team has nearly doubled in size in little over a year. The new hires bring rich experience and expertise across banking, hedge funds, asset management, asset owners and consulting3.  

This latest announcement follows the £32 billion Scheme’s recent statement that it has now reached the scale where it is set to begin investing in private markets from later this year. The People’s Pension already invests 14 per cent of its members savings in UK-based assets within its growth stage default fund.  

PIL will continue to benefit from the expertise of investment consultants where appropriate, using consulting firms on a project basis with a panel of potential providers.  

 Mark Condron, Chair of The People’s Pension Board of Trustees, said:

“It has been great to see the development of the investment team within People’s Partnership and we believe we are now at a stage where it is appropriate for the team to take on the primary advisory role to the Trustee.   

  “We thank Barnett Waddingham for their work in this role for much of the last decade which has helped put the People’s Pension in the strong position it is today and for their support in ensuring a smooth handover as we transition to the new arrangements with the maturing of the investment capability within People’s Partnership.”  

 Dan Mikulskis said:

“This is an important stepping stone in building the foundations of a world class asset owner, projected to be overseeing £50bn within the next four years.  

  “Advising our Trustee directly will enable us to find and implement new ideas more efficiently and quickly, leaving additional value in the hands of our members. It will enable us to develop the shared bond between executive and trustee board essential to the long-term success of asset owners.”  

 Chris Fagan, Chair of The People’s Pension’s Trustee Investment Committee, said:

“I am looking forward to working together with Dan and team extremely closely over coming years to deliver great outcomes for members of the People’s Pension. A close partnership between an investment committee and in-house experts is a key part of creating a great asset owner.” 

  ENDS  

The People’s Pension targets investing up to £4 billion into private market assets 

The People’s Pension1 has today revealed that it is set to start investing a significant proportion of the £31bn of assets it manages into private markets later this year, with a target to grow this allocation to £4bn by 2030.  

The nation’s biggest independent pension master trust says it is preparing to take its first steps into private market investment in the coming months with the imminent appointment of a Private Markets specialist and creation of a research capability. A substantial part of this new allocation of assets could be deployed in the UK, if assets are available that meet the return requirements. 

It is expected that over time The Trustees of The People’s Pension will target allocating up to 10 per cent of growth pool assets – or £4 billion2 – ­by 2030, initially in assets such as infrastructure and real estate. The Scheme has said this allocation will be dependent on it being able to access a ‘dependable pipeline’ of good quality investable assets that meet its return requirements at a fee level that leaves the benefits in the hands of members, and with the right operational structures in place.   

This latest announcement follows the £31 billion Scheme’s statement last year that it has now reached the scale to deploy meaningfully into private markets. The People’s Pension already invests 14 per cent of its members savings in UK-based assets within its growth stage default fund. 

Mark Condron, Chair of The People’s Pension Board of Trustees, said:

“What we are announcing today is a significant step forward on the path towards The People’s Pension investing in private markets, including key parts of the UK economy. 

“We are demonstrating how a responsible asset owner, operating at the right scale, can invest in both the best interests of its members and to the benefit of the wider economy in which they work.” 

Rachel Reeves MP, the Chancellor of the Exchequer, said:

“Growing the economy is the number one mission of the Government. This public commitment from one of the UK’s largest independent pension master trusts to invest here, at home in Britain, will help drive economic growth and support our milestone of improving living standards across the UK.”

Patrick Heath-Lay, Chief Executive Officer of People’s Partnership, which provides The People’s Pension, said:  

“We’re at a pivotal time for UK pensions with the government indicating a direction of travel toward scale and value for savers. As an independent £31bn master trust, without shareholders, we believe that now is the time to increase our investment in private assets for the benefit of our savers and the growth of the UK economy. The People’s Pension has a vital role to play in this exciting plan for the future of UK retirement savings.” 

Dan Mikulskis, Chief Investment Officer of People’s Partnership, said:

“As one of the fastest growing asset owners in the UK, our in-house investment expertise has grown significantly over the last 12 months and this journey will continue with the imminent appointment of a private markets’ specialist, broadening our investment reach. 

“In order for us to invest in private markets over this period it’s critical that the wider investment community, with support of the Government, provide a dependable pipeline of investable opportunities which deliver good value for our 6.8 million savers.” 

ENDS 

People’s Partnership announces appointment of new deputy Chief Investment Officer

People’s Partnership, provider of The People’s Pension, has today further strengthened its rapidly growing investment team with the appointment of Phil Butler as Deputy Chief Investment Officer.

Phil joins the leading workplace pension provider from M&G plc, where he was a multi-asset portfolio manager in the Treasury and Investment Office. Starting his new role this week (December 2), Phil will be overseeing the investment operations and responsible investing teams at People’s Partnership at its City of London office, which opened at the start of the year.   

He joins at a time when The People’s Pension recently reached the £30bn assets under management milestone and is expected to reach £50bn in the next four years. Earlier this year the Scheme’s Trustee Board signalled its readiness to invest in private markets, due to the growing scale and expertise.

Commenting on his appointment, Phil said: “I’m delighted to be joining this fantastic organisation. The People’s Pension is one of the fastest growing asset owners in the UK and I have been impressed by their ambition and business outlook. I’m looking forward to working with such a talented team, one that is committed to securing the best outcomes for its 6.8 million members.”

Dan Mikulskis, the Chief Investment Officer at People’s Partnership, said: “Phil’s appointment underlines our commitment to building foundations for The People’s Pension becoming a world class asset owner. He will play a key role in helping People’s Partnership grow our team’s investment capabilities as we continue to make our increased scale work for members.”

ENDS

The People’s Pension halves carbon emissions of main investment fund

The UK’s largest independent master trust, The People’s Pension,has more than halved the carbon footprint of its main investment fund in 12 months.

In its annual Taskforce on Climate Related Disclosures (TCFD)2 report, People’s Partnership, provider of The People’s Pension, revealed that the total carbon emissions within the scheme’s Global Investments (up to 85% shares) Fund have been reduced by 53 per cent3.

Although the scheme’s assets have grown by £8billion in the past 12 months, the total carbon emissions of the Fund have dropped by approximately 400,000 tonnes of CO2e – which is the equivalent of a reduction of 35.3 tonnes of CO2e per £1 million invested.

Today’s announcement comes nearly eight months after the £30bn AUM fund announced the move of £15 billion of its assets under management into climate aware investment strategies4 and this allocation has since risen to £18 billion. It had been anticipated that this allocation of funds would reduce carbon emissions of the relevant fund by at least 30 per cent, but the new TCFD data shows this reduction is significantly higher.

Following the change to the asset allocation, the report lists three sectors as being responsible for over 70% of the remaining emissions of The People’s Pension’s growth assets: Materials, Utilities, and Industrials. Between 40-60 per cent of the investee companies within these sectors have set science-based targets5 to reduce their emissions. Overall, the Fund has seen an 8 per cent increase to 39 per cent invested in companies setting these targets.

The indices6 which guide the fund’s equity investments aim for a seven per cent per annum reduction in carbon footprint each year into the future, consistent with the Paris Agreement on Climate Change.

While updating the TCFD report the People’s Pension has added a new section on Nature as well as adding additional data drilling down into portfolios and sectors in order to position it as the scheme’s leading reporting document for Responsible Investment.

Mark Condron, Chair of The People’s Pension Trustee, said:

“This report tells a compelling story about how we use our size and influence to ensure our members’ savings are allocated and managed responsibly and reinforces our commitment to tackling climate change through investing.”

Dan Mikulskis, Chief Investment Officer at People’s Partnership, which provides The People’s Pension to 6.8 million savers, said:

“With greater size comes greater responsibility. We are committed to doing what we can to make sure the companies we invest in follow certain standards particularly in material sectors and in our priority areas of Climate, Nature and Human Rights.”

“The TCFD report has become a useful reporting vehicle across a range of climate and Responsible Investment areas”.

“Portfolio changes are one pillar of our strategy here, the other being our stewardship approach which is driven by the scheme’s recently-published Responsible Investment Policy7”.

The publication of the TCFD report follows the launch of The People’s Pension’s enhanced Ethical Fund8 which now sits among the leading ethical and sustainable offerings in the UK market.

The new-look fund’s enhancements include adding significantly more exclusions, such as a blanket exclusion for fossil fuels, including the value chains of coal, oil, gas, and carbon-intensive power generation. Other new exclusions in the ethical fund include weapons, alcohol, tobacco, gambling, adult entertainment, unsustainable palm oil, recreational cannabis, and for-profit prisons.

The People’s Pension’s offering implements a strict decarbonisation target as the upgrades will cut the funds carbon intensity by at least 50 per cent, with the goal of further reducing it by 10 per cent per annum.

ENDS

Provider of The People’s Pension moving towards investing in UK assets

People’s Partnership1, provider of The People’s Pension to more than 6.7 million people, has today said that it is moving towards investing in private markets, including UK-based assets.

In its response to the call for evidence ahead of the Government’s first pension review, the profit for people organisation has stated it is reaching the necessary scale, as well as developing the in-house capabilities that are needed, to invest in assets such as infrastructure and real estate.

The leading workplace pension provider and Trustees of The People’s Pension, who manage £29 billion of their members money, have said that investing in such assets in a way that leaves maximum value in the hands of members is part of a long-term plan for the future of the business. The People’s Pension already invests 14 per cent of its main investment fund in both UK listed companies2 and Government debt.

Mark Condron, Chair of The People’s Pension Trustee Board, said:

“As Trustees, we firmly believe in diversified investment opportunities that present good, consistent returns for our members over the long term. We have been looking at private markets for some time and we are now approaching the scale where we believe we will be able to invest in them effectively. Investing in such assets has always been dependent on schemes such as ours reaching scale.

“The business is building a team of specialists that will enable us to overcome some of the hurdles we have faced with accessing private markets in a way that maximises value for members.

“We remain committed to the fund having a positive impact both on our members as well as the UK economy.”

Dan Mikulskis, Chief Investment Officer at People’s Partnership, provider of The People’s Pension, said:

“It’s important that policymakers and the industry look closely at the Australian and Canadian models as these countries deliver the outcomes the UK government is looking for.

“The People’s Pension is fast approaching having £30bn in assets under management and has built the scale to start seriously considering investing in private markets. We are currently in the process of hiring the investment team members who will make this possible.

“We are also advancing work both with commercial asset managers as well as asset owner peers, with a view to putting top-class proposals in front of our trustees to allocate a portion of our assets to private markets. We believe that with our own asset ownership capabilities in place we will continue deliver fantastic value to members’ pensions.”

ENDS

The People’s Pension strengthens its expectations of fund managers in new Responsible Investment Policy

Leading master trust The People’s Pension1 has strengthened the expectations of its investment managers in its new Responsible Investment policy.

The £26 billion pension scheme’s newly published Responsible Investment policy2 sets out the minimum requirements and ongoing expectations that it has for its fund managers.  As part of its minimum requirements, fund managers are expected to have a commitment to net zero and adequate stewardship resourcing.  If these minimum requirements are not met, the Scheme’s Trustee has warned it will put their relationship under review, which could result with them moving their 6.7 million members’ assets to other managers.

The new policy also underlines The People’s Pension’s commitment to working with industry-wide groups such as Nature Action 1003 and Climate Action 100+4. The Scheme believes these groups are the best way to collaborate with others, to improve stewardship and engagement levels on behalf of retirement savers and other investors, and most importantly, expects the same commitment of its fund managers.

As part of the policy, the Scheme’s Trustee has set out clear objectives regarding its Responsible Investment approach. The policy sets out specifically how The People’s Pension plans to use its scale and influence as one of the largest UK asset owners toward this objective and the areas that it has prioritised.

The Scheme’s Trustee has said that climate change, nature and human rights are its three stewardship priorities going forward.

Fund managers will be expected to support The People’s Pension in achieving their emissions reduction targets, which are set out over the short, medium and long term:

• Net zero greenhouse gas (GHG) emissions by 2050.

• Halving its GHG emission intensity by 2030 for the Scheme’s growth assets.

• 30% GHG emissions intensity reduction by 2025 for the developed equity portion of the portfolio.

The document also includes new net zero voting guidelines which The People’s Pension expects its fund managers to implement5. It details when to vote against company directors in fossil fuel reliant sectors on both the supply and demand side, and on deforestation.  The guidelines represent a targeted approach to voting and company engagement, to achieve the maximum potential for impact. 

Leanne Clements, Head of Responsible Investment at People’s Partnership, which provides The People’s Pension to 6.7 million UK members, said: 

“Our new Responsible Investment policy has both our members’ views and interests at its very heart. With stewardship firmly under the microscope and the clock running down on critical issues such as climate change, now is the time to be bolder and braver in terms of what we expect of our fund managers. 

“Gone are the days of “tea and cake” engagement – what we want from our fund managers is evidence of a targeted approach to engagement, routed in a robust theory of change to achieve maximum impact.  We want to see evidence that limited stewardship resources are being employed in the most effective way possible, and that fund managers execute robust voting escalation strategies.  As an important complement to our portfolio construction approach on climate change6, we recognise the need to achieve real-world emissions reductions in priority sectors through targeted engagement.” 

Mark Condron, Chair of the Board of Trustees at The People’s Pension, said:

“The main objective is to drive better investment outcomes for our members and our stewardship objective is to encourage investee companies to behave in more responsible and sustainable ways. Hard working pension savers expect asset owners such as us to ensure that their money is invested responsibly, and this report outlines how we are doing just that. Our approach is to ensure both financial value and resilience of our members’ savings, which is why the requirements we have of fund managers are so robust.”

ENDS

The People’s Pension moves £15bn of assets into climate aware investment strategies

The People’s Pension1, the leading workplace pension scheme, has today announced the move of £15 billion of its assets under management into climate aware investment strategies – the biggest single move of its kind by a UK master trust.

This means 70% of the Scheme’s main investment fund2 will be aligned to the Paris Agreement goal of keeping warming below 1.5°C3.

The change means the carbon footprint of the investments for the majority of its 6.5 million members has reduced by 30 per cent. This change also results in divestment from companies that produce thermal coal within the assets covered by this new strategy.

The new investment approach4 is designed to adjust the level of investment in companies based upon their exposure to climate risks and opportunities, and tracks regional indices, which aim to exceed the minimum standards of the European Union’s Climate Transition Benchmark5. This means it will have at least a 30 per cent reduction in emissions initially and will further reduce by 7 per cent each year, to be aligned with the target of reaching Net Zero by 2050.

The primary aim of the change is to manage the long-term risks posed to members’ investments by climate change and a green transition, that aren’t currently being priced by the market.

It also means that members can be confident their investments are working toward the goals of the Paris Agreement.

Commenting, Dan Mikulskis, the Chief Investment Officer for People’s Partnership, provider of The People’s Pension, said: We believe the changes we have announced mean that The People’s Pension is now one of the greenest master trusts in the UK, which is great news for our members. Asset owners like us are uniquely positioned to use our size and influence to ensure our members’ savings are allocated and managed responsibly, and that the companies in which we invest are acting in responsible and sustainable ways.

“Key to our investment philosophy is conviction in what we do – if we really believe in something we want to make it core to our members’ retirement savings, rather than a tick to a box, and that’s what we’ve done here.”

The new investment strategy is designed to deliver even better investment returns for savers.

Commenting, Mark Condron, Chair of The People’s Pension Trustee, said:

“This is a hugely significant moment for The People’s Pension and its 6.5 million members as it reinforces our commitment to tackling climate change through investing.

“Our members can be confident their savings are working towards achieving Net Zero targets and not against it.”

ENDS

The People’s Pension becomes UK’s first independent master trust to reach £25bn assets under management

The People’s Pension1 has announced that it has passed £25bn in assets under management (AUM), making it the first independent master trust in the UK to announce the milestone.  

This reinforces its position as the largest independent master trust in the UK, which has been achieved in a little over a decade since it was launched in 2012. Today the scheme, provided by not-for-profit organisation People’s Partnership, serves more than 6.5 million members from over 100,000 employers from all sectors.

Commenting on reaching the milestone AuM figure, Patrick Heath-Lay, Chief Executive Office of People’s Partnership, said:

“Reaching £25 billion assets under management is a significant milestone for The People’s Pension, which has achieved remarkable growth over the past decade or so.

“As an organisation founded for social good, everything we do, we do in the best interests of our members, meaning this latest milestone is great news for them. Our scale enables us to deliver fantastic value, with our members receiving full benefit of our activities. From here the scheme will only continue to grow and we are on track to reach the £50 billion mark in the next five years. We anticipate that this rate of growth will be further accelerated by the steps being taken to consolidate the workplace pension market so that there are fewer, bigger and better value schemes available.

“Our increasing scale and use of our ‘profit for people’ philosophy, gives us the ability to deliver exceptional value and take advantage of a consolidating marketplace.”

Mark Condron, Chair of The People’s Pension Trustee, said: “Scale is incredibly important to pension schemes and the more The People’s Pension continues to grow, the more we can seek to provide even better value for our members.”

The master trust recently outlined its ambition to move from the auto-enrolment space to become a leading workplace pension provider, as it continues to build its proposition with the recent introduction of a new set of retirement planning tools, a financial wellbeing offering, and a member app set to be launched later this year.

ENDS

Why more people are choosing to place their trust in master trusts

I’ll always look back on 2022 as a milestone year for the pension industry. This is the year that we marked the 10th anniversary of auto-enrolment, an initiative that has enabled millions of workers around the UK to save more towards their retirement. To be more precise, more than 10.6m people have been auto-enrolled into a pension scheme since auto-enrolment launched1, which is a fantastic achievement. 

This has also been a standout year for all of us at The People’s Pension. Not only are we toasting our own 10th birthday, we’re still growing and now have nearly 6m members enrolled in our scheme. Over the last decade, we’ve helped these members accumulate more than £17bn in pension savings – an incredible feat that’s definitely worth celebrating.

Offering a helping hand in uncertain times

More people than ever are choosing to trust us with their pension savings – and this growth is something we’re seeing among other master trusts as well. Which begs the question, “What’s driving this trend?”

At a closer glance, it seems to me that there are several factors at play here. For example, the current cost of living crisis and economic uncertainty is leading more employers to seek out pension schemes that offer better value and greater stability for their employees. With their low charges, very high standards of governance and transparency, master trusts are, therefore, becoming a more attractive proposition for many.

In addition, new legislation is placing further pressure on schemes to demonstrate the value they’re offering to their members. For instance, the introduction of value for members assessments means certain defined contribution schemes must now self-assess to demonstrate the quality of their governance and administration, among other criteria. If they fail to meet certain standards, they’ll need to make sweeping changes or run the risk of being wound up entirely.

With their larger economies of scale and robust frameworks, master trusts are well-equipped to meet these new challenges. This includes The People’s Pension, the UK’s largest independent master trust. We’re continuously improving our offering to members to help them make more informed choices that will lead them towards a more comfortable retirement.

Looking to the future

This has also been an exciting year on a more personal level. After serving on the Trustee Board for the last 2 years, it’s an honour and a privilege to now be taking on the role of the Chair of the Trustee at The People’s Pension. My predecessor, Steve Delo, has done an outstanding job in the role, and it will be very hard to fill his shoes. He’s been instrumental in building the scheme to where it is today. We place our members at the heart of everything we do – whether this be giving £12m a year back to savers through the rebate on our annual management charge, or providing a carefully selected range of investment options to give people a pension fund that best suits their needs. With the support of the Trustee Board and our excellent in-house Pensions Management team, we’ll maintain the incredibly high standards set by Steve in order to best meet the needs of pension savers.

Our heritage is based upon operating a master trust that strips out complications and simplifies pensions, ensuring members and employers aren’t overwhelmed by complex charging structures and endless fund choices. This is something I’m keen to continue as we move forward. As the UK pension system develops, we’ll evolve alongside it with more tools and services to provide further support to savers.  

Demand for master trusts has never been higher, and it looks certain this trend will continue to grow next year and beyond. With the hard work and dedication of our team and the new measures we’re putting in place, I’m confident those choosing The People’s Pension will find everything they need to secure a better financial future.

[1] Review of the automatic enrolment earnings trigger and qualifying earnings band for 2022/23: supporting analysis – GOV.UK (www.gov.uk)

information

This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.

New head of Responsible Investment appointed

B&CE, provider of The People’s Pension1 has reinforced its commitment to investing responsibly with a new appointment to its Investment Business Unit.

The organisation, which provides a pension to one in five UK workers, has appointed Leanne Clements as its new Head of Responsible Investment.

Joining from the independent financial think tank, Carbon Tracker Initiative, where she was Head of Stewardship for the UK and EU, Leanne will develop B&CE’s approach to responsible investing in its management and stewardship of members’ investments.

Previously, she was Campaign Manager for The Association for Member Nominated Trustees and held senior responsible investment roles at multiple UK pension schemes.

Commenting on her appointment, Leanne said:

“I’m delighted to join B&CE at such an exciting time in its history, and at a pivotal time for responsible investment more broadly. I’m looking forward to building on the brilliant work the team has already done in this space and putting the best interests of the six million people saving with The People’s Pension, at the heart of our investment decisions.”  

Jonathan Cunliffe, Managing Director of Investments of B&CE, said:

“Leanne’s credentials and experience are first class and we’re so pleased that she has decided to join our expanding team. Responsible investment is at the very heart of what we’re about and her appointment is great news for our members.”

ENDS