The British Coal Staff Superannuation Scheme has appointed BlackRock to advise on and manage the fund’s £8bn investments in a fiduciary mandate. 

The trustees of the scheme for the defunct British Coal told members that they chose BlackRock “for its expertise, resources and ability to support the Scheme as it continues to develop”. 

They explained that the closed scheme has been maturing and “needs to balance several things at once: paying pensions from investment income, keeping funding stable, and making sure assets continue to grow over the long term”, deciding that BlackRock would be able to meet these needs. 

Coal Pension Trustees  jointly owned by BCSSS and the Mineworkers’ Pension Scheme, is the executive to the BCSSS Trustees and employs around 40 people. No staff members from CPT or CPTI will be transferring to BlackRock as a result of the new fiduciary mandate. This is different from previous deals involving the manager. When British Airways Pensions hired BlackRock as outsourced chief investment officer in 2021, some staff moved across to ensure continuity. The same happened when the Royal Mail Pension Plan appointed BlackRock as OCIO in 2023.

The scheme underperformed its composite benchmark, the annual report to the end of March 2025 shows, returning 1.07% over one year instead of 4.82%, and 0.4% over three years instead of 3.95%. Over five years, it posted 5.1% instead of 7.54%.  

“One of the biggest drivers of the underperformance over the last year was weak relative performance from several illiquid assets, particularly private equity and infrastructure relative to their asset class benchmarks,” the report states.  

It explains that private equity valuations were static relative to a positive public market benchmark, and some challenged infrastructure assets were sold early at a discount to their last quoted valuation. 

“The positioning of the portfolio within public equities also detracted from relative performance as some of the thematic positions related to climate risk management, environmental opportunities and healthcare struggled,” it added. “On the other hand, the scheme’s restructured UK property portfolio produced strong positive relative returns.” 

BCSSS has a relatively aggressive investment strategy for a closed defined benefit scheme, enjoying a government guarantee. The trustees convinced the government last year to relinquish a £2.3bn investment reserve, meaning about 45,000 pensioners picked up an average top-up of £100 a week plus a one-off lump sum of £5,500.

The trustees are due to meet industry minister Chris McDonald in mid-July to lobby for further concessions, as they seek a right to 100% of any surplus to enhance members’ pensions and for this to be distributed when it arises, while all downside risk remains with taxpayers. It is unclear if this meeting will go ahead now the ruling Labour is due to have a new leader. 

In 2025, BlackRock already managed some scheme assets before becoming fiduciary manager. It held about £900m in global investment grade credit and £1.2bn in listed equities for the scheme. The manager also looked after a £1bn brief for government bonds in 2024, but a year later this had been divested. 

Instead, a £990m liability-driven investment portfolio was set up with Schroders. The firm also managed about £500m in liquid securitised assets and £210m in high yield credit in March 2025. 

PGIM held a £715m brief of global IG credit last year, while Wellington managed £228m in listed equities, as well as £194m in commodities. Ninety One had £117m in equities and £220m in high yield credit. 

Between £50m and £60m each was in UK infrastructure mandates with Greencoat, Dalmore and Aviva, with Nuveen and LaSalle managing £613m and £59m in property, respectively. 

The scheme also employed Tufton Oceanic for shipping assets, Brevan Howard as a hedge fund and Northern Trust for foreign exchange derivatives, along with unnamed managers to handle £796m in private equity, £441m in private debt and £409m in special situations debt.