Abrdn and XPS Pensions Group will launch a new DB pensions master trust in the second quarter of 2022.
Abrdn has formed a strategic alliance with XPS Pensions Group. The asset manager will provide the investment solutions, while XPS will offer actuarial and investment consulting, administration, secretarial and covenant services.
It is understood that this is first DB master trust to be launched through a partnership with an independent consultancy firm and an asset manager.
The new trust will target smaller and medium-sized schemes and help them set their pension strategy and deliver this in an efficient operational model. Abrdn says this should provide cost savings, governance improvements and an opportunity to increase member benefit security through a one-stop-shop solution, encompassing all services required to run such legacy DB pension schemes.
Abrdn says it will integrate ESG considerations into its investment solutions, alongside an integrated risk management approach. It says this should allow corporate sponsors to free up more time to focus on their underlying business.
There are still over 4,000 small to medium sized DB pension schemes with combined assets of nearly £200 billion that could potentially benefit from consolidation, by providing opportunities to those schemes that are not always available to them as standalone schemes.
Abrdn CEO Stephen Bird says: “As abrdn continues to focus on delivering solutions for clients, I am delighted that we will be launching a UK defined benefit master trust.
“The abrdn pensions master trust has been designed with XPS Pensions Group to harness the relevant expertise of both firms and offer a solution that provides a professional governance model, high-quality pensions consultancy and administration services, material expense savings through economies of scale and access to a broad range of abrdn’s relevant investment strategies.”
Paul Cuff, Co-CEO of XPS Pensions Group adds: “We are delighted to partner with abrdn in the development of a new defined benefit master trust.
“This new solution should help bring governance and efficiency improvements to the benefit of thousands of pension scheme members. We have worked hard with abrdn to develop integrated funding and investment solutions that pass on the combined benefit of their investment management expertise and our investment, actuarial and administration expertise.
“This master trust gives smaller schemes access to the same opportunities that much larger schemes enjoy and gives peace of mind to corporate sponsors allowing them to dedicate more time to running their business.”