Schroders Capital Climate+ launched last year and it says it invests in, among other things, climate mitigation and climate adaption. It also launched in January an energy transition infrastructure fund, launched with external DC money.
The company is pitching its funds to both master trusts and single employer schemes; minimum investment is £5mn and both funds have an initial lock up period of three years from launch, after which the fund will provide redemptions of 5 per cent net of NAV per quarter.
It is not revealing how much is in these funds, but Joe Dabrowski, deputy director of policy at the Pension and Lifetime Savings Association, says LTAFs have been "very popular", and he is expecting several more to launch this year.
Value for money framework
Another measure being brought forward is to refocus pension schemes away from their preoccupation with cost and prioritise 'value', as in overall outcomes – including investment returns – for clients.
And, in line with a general consolidation agenda, if a scheme is not deemed to be performing, then it could be forced to merge with other schemes.
In the value for money framework consultation paper published last year, the two regulators and DWP announced they wanted to expand on the present consolidation of under-performing small occupational schemes, widening it out to bigger schemes, with legislation for key disclosures on investment performance intended for 2027.
| Top 10 master trust league table, 2024 H1 | ||
|---|---|---|
| Master trust | FUM | No. of members |
| Nest | £36.8bn | 12.8mn |
| Legal & General | £25bn | 1.8mn |
| People's Pension | £25bn | 6.5mn |
| Lifesight | £17bn | 360,000 |
| Aviva Master Trust | £9.9bn | 478,434 |
| Standard Life | £8.8bn | 278,493 |
| Mercer Master Trust | £7.3bn | 234,000 |
| Fidelity Master Trust | £7.1bn | 165,488 |
| Aon Master Trust | £5.5bn | 182,000 |
| Smart Pension (Current FUM includes figures for Crystal Master Trust, being incorporated with SPMT in 2024) | £4.9bn | 1.4mn |
| Source: Go Pensions | ||
The paper states: "Our expectation is that, over the next few years, schemes of under £100mn in assets not offering value for money will have either wound up, be in the process of winding up, or will have made improvements and therefore consider themselves to offer value for money.
"Where the value for members assessment encourages schemes to improve or consolidate into a better-performing scheme, we are considering whether the value for money framework could place a statutory requirement on trust-based occupational pension schemes to consolidate following repeated ‘underperforming’ assessment results, where this is in the best interests of savers."
Chancellor Hunt also stated in the Autumn Statement last November that: "By 2030, the majority of workplace DC savers will have their pension pots managed in schemes of more than £30bn".
This is quite a clear direction of travel, according to Tess Page, UK wealth strategy leader and partner at Mercer.
She says: "[For many people] you're never going to be in a scheme of that size in six years' time. [Scheme trustees are asking], will we have the scale to deliver and should we be thinking about master trusts?"
Many schemes are looking to consolidate into master trusts already, which have the scale to invest in a wider range of assets.
Kate Smith, head of pensions at Aegon, says: "It's been happening for a few years, but the pace is picking up. By 2040 there will be far fewer single employer trusts around.
