Hymans Robertson Provides Investment Advice on Landmark Run-on Deal

The Trustee of the Stagecoach Group Pension Scheme has agreed a run-on and surplus-sharing framework with Aberdeen Group. As part of the deal, Aberdeen will replace Stagecoach as the Scheme’s sponsoring employer and Aberdeen will take on investment management responsibilities for the Scheme’s assets.

The deal marks a ‘first’ for the industry, which promises to deliver long-term benefit enhancements to members’ pensions. The Scheme’s assets will be invested to deliver future surplus funds to be distributed, with appropriate guardrails and risk controls.

As investment adviser to the Trustee of the Scheme, Hymans Robertson delivered strategic advice and investment due diligence to support in agreeing the right framework to be able to deliver the Trustee’s objectives over the long term.

Calum Cooper, Head of Pension Policy Innovation, Hymans Robertson said:

"It's been a privilege for Hymans to lead the strategic and investment due diligence on this DB pensions 'first' on behalf of the trustees. When it comes to surplus sharing, this deal asks the question: do members care more about what they can buy with their pension, or the actual amount of their pension.

"Ultimately, this trustee-led transaction found a way to put surplus to work with productive investments that meaningfully improve member outcomes today, and with the expectation of providing further improvements via surplus sharing in the future. This DB innovation first offers protection against what members can buy with their pensions. Given the pensions policy, fiscal and political landscape, it will not be the last."

Simon Jones, Partner and Lead Investment Adviser to Stagecoach Group Pension Scheme, said:

"It’s been a pleasure to lead the investment advice and due diligence work over recent months, working with the Trustee and other stakeholders to deliver this innovative solution. This is a great outcome for the Scheme members who are expected to see benefit improvements as a consequence of being able to agree a longer-term investment strategy that will invest in productive assets. This demonstrates the ongoing potential of DB pensions.”

Important information

This communication is based upon our understanding of events as at the date of publication. It is a general summary of topical matters and should not be regarded as financial advice. It should not be considered a substitute for professional advice on specific circumstances and objectives. Where this page refers to legal matters please note that Hymans Robertson LLP is not qualified to provide legal opinion and therefore you may wish to obtain independent legal advice to consider any relevant law and/or regulation. Please read our Terms of Use - Hymans Robertson.