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The £1bn Merchant Navy Ratings Pension Fund has changed its fiduciary manager following a competitive tender.
The pension fund for seafarers in the Merchant Navy picked Schroders Solutions for the fiduciary mandate, replacing WTW.
“During the very competitive selection process, the trustee learned that there were high quality alternatives on a par with our current provider,” said trustee chair Doug Ross from Pi Pension Trustees.
He added: “Leaving WTW was a very tough decision for the trustees to make, particularly given the broader relationship they have with the fund and the excellent service that they have provided over the years, but we were unanimous in this decision.”
WTW was appointed 10 years ago. The trustee had previously committed to reviewing the arrangement in 2021 as part of its good governance framework and stressted that the change of fiduciary manager will not affect other relationships the fund has with WTW, which will continue to deliver actuarial, data and employer liaison services.
Under the new arrangement, Schroders will give the fund access to liability-driven investment, buy and maintain credit and structured equity, as well as “absorbing and aligning” the MNRPF’s existing private markets portfolio. Its investment platform is aligned with the trustee’s socially responsible investing aspirations, according to the manager.
Ajeet Manjrekar, who heads up UK client solutions at Schroders, said: “We are grateful for the trust placed in us and look forward to working closely with the trustee to help them meet their investment objectives.”
Peter Daniels, a partner at Barnett Waddingham, advised the MNRPF on the selection. He said trustees continue to review their arrangements as they navigate a more complex investment and regulatory environment. The trustee “has added security and capacity to focus on its strategic priorities”, he remarked.
Last year, the MNRPF trustees reached a deal for future commitments to the fund by P&O Ferries, as concerns abounded that the DP World-owned ferry company could be unable to fund its pension deficit, potentially leaving other companies in MNRPF on the hook. P&O Ferries had outstanding debt to MNRPF of about £146m, secured by a guarantee over three of its ships. The agreement was made after P&O hit the headlines by sacking its 800 employees without the required consultation and replacing them with international agency workers paid as little as £5 an hour.
Elsewhere, the MNRPF updated members last month saying that it has paid £28m in pensions arrears with interest so far and £700,000 a year in increases to future pension payments to settle for ill-health pensions. In 2018, the fund investigated some changes that were made to ill-health benefits in the 1990s and asked the High Court for help, resulting in a court-approved settlement in February 2022.
