Members of the three Carillion defined contribution schemes have moved to master trust LifeSight.
The Willis Towers Watson's DC multi-employer pension trust announced today (April 30) it had taken over the Carillion Pension Plan, the Planned Maintenance DC Pension Scheme and the Carillion Retirement Plan - with 4,100 members and £267m in assets.
With this addition LifeSight’s total membership will reach 105,000 while assets under management will rise to £4.2bn.
After unsuccessful talks with its lenders and the UK government, Carillion made an application in January 2018 to the High Court for compulsory liquidation.
Soon after it was announced that the contractor’s defined benefit pension schemes would enter an assessment period at the Pension Protection Fund.
Carillion had 13 final salary plans in the UK with more than 28,500 members and an aggregate deficit for PPF purposes of around £800m.
Dianne Day, client director at ITS which is trustee of the Carillion DC schemes, said LifeSight has been flexible and understanding throughout this process, reflecting the particular needs of scheme members whose sponsoring employer had gone into liquidation.
She said: “LifeSight offers a top-level service and governance for an orphan membership base, which is particularly important given that there would be no continuity of employer sponsor or ongoing contributions in this unusual circumstance.”
LifeSight was the first master trust to apply for authorisation by The Pensions Regulator, which has been granted.
So far, five workplace pension providers have been authorised by TPR.
Under the new registration process, master trusts have to hold enough capital to cover the cost of a worst-case scenario, such as the cost of transferring to another scheme or of winding up, without charging members.
The government and the regulator have been discussing these new rules since 2016 and were expecting them to drive consolidation in the market.
Fiona Matthews, managing director of LifeSight, said Carillion’s pension schemes had a unique set of circumstances and the provider was able to accommodate their particular requirements.
She said: “We expect that authorisation will give further confidence to trustees and employers who have been watching developments, and reassure them that moving to a master trust can improve pension outcomes.”
maria.espadinha@ft.com
