In a radical move, the Royal Mail Pension Plan has shifted its entire £8.8bn defined benefit scheme over to Blackrock to manage the assets.
As a result, the Royal Mail Pension Plan’s investment team will move to the asset manager, as a so called outsourced chief investment officer, to execute the scheme’s investment strategy for its 118,000 members.
The move, it is hoped, will allow the scheme to benefit from the asset manager’s scale and risk management capabilities.
Until now, the scheme’s assets had been run in-house, through a team headed by chief investment officer Ian McKnight.
He and the rest of the investment team are now employees of Blackrock. But McKnight will, however, continue to oversee the scheme’s investments.
No redundancies in the investment team or elsewhere will result from the move.
Richard Law-Deeks, chief executive officer of Royal Mail Pension Plan, said the trustee’s main priority is to ensure the retirement benefits of its members are 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,” he said.
“It is now time to consider how to lock in the stability and continuity of this position.”
Law-Deeks added that the arrangement was built on having a long working relationship with Blackrock. “With this agreement, we ensure that key institutional knowledge is retained, while benefitting from Blackrock’s wider expertise and scale.”
Sarah Melvin, head of Blackrock’s UK business, said she was “proud to be entrusted with managing the Royal Mail Pension Plan’s assets”.
This is just the latest example of Blackrock benefitting from pension schemes moving their assets over to the asset manager.
In June 2021 it agreed an outsourced chief investment officer arrangement to run £21.5bn of pensions assets for British Airways’ schemes.
Comments