National Pension Trust commits to new sustainable default strategy
£978 million in members’ assets will be invested according to a sustainable strategy from this month
The change will mean over 44,000 members will have their money invested more sustainably
100% of the assets held in the Trust’s default arrangement and invested in growth strategies will be affected by the change
The National Pension Trust (NPT), a multi-employer master trust powered by XPS Pensions Group, is set to shift its Default Arrangement to a strategy that will be guided by environmental, social and governance principles from this month. The change will mean that the savings of over 44,000 members, representing £978 million in total assets, will be invested more sustainably going forward.
The Trust’s new ESG-oriented default arrangement will focus on climate change and the carbon transition while aligning with a 2oC investment policy. It will also aim to invest members’ savings in a way that aligns with the UN’s Sustainable Goals.
The new investment strategy will see NPT act in partnership with State Street Global Advisors, the Transition Pathway Initiative (TPI), and Legal and General Investment Management to align its portfolio with the goals of the Paris Agreement and inform its investment research. The TPI seeks to speed the transition to a low-carbon economy by weighting investment towards those companies that can demonstrate that their operations align with Paris Agreement targets, and which meet the recommendations of the Taskforce on Climate Related Disclosures.
Commenting on the announcement, Paul Armitage, Head of the National Pension Trust, said: “Climate change poses a real risk to our future, which is why we want to make the way we invest assets more sustainable. That’s why we have selected the TPI – it achieves our initial goals for reduced carbon exposure today, reducing carbon related metrics by c. 50% now - but also incentivises a transition to future lower carbon intensity for businesses around the world by allocating capital to those firms that do it best.”
Ian Davies, Chair of Trustees for the National Pensions Trust, added: “Developing our new default fund is an important step for the National Pension Trust. It is another example of how NPT is committed to providing market leading investment strategies that reflects the preferences of our members while helping employers meet their ESG responsibilities.”
Alistair Byrne, Head of UK Institutional Distribution at State Street Global Advisors, commented: “UK pension schemes are actively seeking to provide their members with exposure to the investment opportunities generated by the transition to a low-carbon economy. This strategy offers an efficient index-based solution, enabling them to improve their portfolio’s carbon profile and reduce climate risk, while maintaining target returns.”
For more information please contact:
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About The National Pension Trust
The National Pension Trust (NPT) is a multi-employer master trust offering members full retirement flexibilities. Economies of scale and cutting edge technology means charges are low for members and there are no ongoing costs for employers. NPT supports over 52,000 members and manages over £1.3bn of assets on behalf of 173 employers.
About XPS Pensions Group
XPS Pensions Group (XPS) is the largest pure pensions consultancy in the UK, specialising in actuarial, covenant, investment consulting and administration. XPS combines expertise, insight and technology to address the needs of over 1,500 pension schemes and their sponsoring employers on an ongoing and project basis. We undertake pensions administration for over 948,000 members and provides advisory services to schemes of all sizes including 47 with over £1bn of assets. We also provide pension advisory and administration services to over 200 defined contribution schemes, with over one million members and combined assets in excess of £15bn.
XPS Pensions Group was awarded Actuarial/Pensions Consultancy of the Year and Investment Consultancy of the Year at the 2021 Professional Pensions Awards and highly commended for Third Party Administrator of the Year and Education /Thought Leadership Initiative of the Year. In 2020, XPS was awarded Third Party Administrator of the Year at the UK Pension Awards for the second year running and has also been ranked the No.1 Third Party Administrator in the Professional Pensions Administration Survey in four of the past six years. Also in 2020, XPS Pensions Group was awarded the FT's PIPA Technology Services of the Year Award and in 2019 awarded Actuarial/Pensions Consultancy of the Year at the UK Pensions Awards.
XPS Pensions Group has also been ranked Gold in the Employee Engagement category and Silver in the Employee-Centric Company category at the 2020 UK Employee Experience Awards. XPS Pensions Group also won two awards at the 2020 Business Culture Awards winning Best Business Culture Transformation Initiative and the overall Gold Award winner for Business Culture.