Increasing the security of members’ benefits

And protecting your pension in the Scheme.

It’s the Trustee’s duty to look after the Scheme’s funds in the best interests of its members and make sure it has enough money set aside to pay members’ benefits whenever they need to be paid.

The Trustee has a plan in place to make sure that it takes less risk in where it invests the Scheme’s funds. It aims to put more money into investments that provide a steady amount of returns, as well as help manage other risks linked to paying pensions for a long period of time, including life expectancy and inflation.

Buy-in policies

In 2018 and 2019, the Trustee took important steps to provide additional protection for members’ benefits in the Scheme by making significant investments with three UK regulated insurance companies called a ‘buy-in’ or ‘bulk annuity’ policy.

For these investments, the Trustee invests an amount (called a premium) with each insurer to cover a proportion of the Scheme’s pensions; in return the insurer guarantees that it will make monthly payments to the Scheme that match the payments for those pensions. The Trustee remains responsible for paying all pensions from the Scheme whenever they need to be paid.

The insurer takes on some of the risks linked to making sure there is enough money set aside for as long as the pension benefits covered by the policy are in payment.

These include:

  • Poor economic conditions, which might reduce the returns being made on the Scheme’s investments.
  • Higher than expected inflation, increasing the amount of pension being paid and the amount of money needed to do so.
  • Members living longer than expected, increasing the length of time that a pension is being paid and the amount of money needed to do so.

The buy-ins are held by the Trustee as investments of the Scheme and members will see no change to how their pensions are provided.

For more information, please read the following announcements:

2018 Buy-in
2019 Buy-in

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