21 February 2024 – Should defined benefit pension schemes run on for longer and put their surplus to work?

All-member Community event

Only members with restricted access (ie. academics, asset owners, government and regulatory, independent advisers/trustees and sponsoring employers) can view this article. Please login or join to view.

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For the first time in a generation many defined benefit pension schemes have a surplus, which raises some interesting questions. The government is considering some radical proposals to make it easier to access the surplus and is also consulting on the possibility the Pension Protection Fund (PPF) will cover the tail risks. There are plenty of good uses for these surpluses as the cost of living crisis bites, defined contribution members face an uncertain retirement and the UK needs to transition to a clean energy future.

We were delighted to have an all-star panel to lead this discussion:

  • David Fairs, Partner at LCP and former Executive Director of Regulatory Policy, Analysis & Advice at The Pension Regulator.
  • Douglas Clark, Head of Research and Solutions at Brightwell.  The BT Pension Scheme has set a strategic course to run on.
  • William McGrath, Founder of C-Suite Strategies and previously CEO at AGA Rangemaster.
Following the panel discussion, we moved to breakout rooms of mixed stakeholders, led by some of our Community Partners, Downing, LCP and J.P. Morgan Asset Management. We then returned to the main room to share insights.

Who should attend?

This event was open to all our members. If your organisation is not yet a member of Pensions for Purpose you may attend an event before deciding whether to join, so please register for future events. 

For more information, please email the Membership Manager.

Speakers' biographies

David Fairs, Partner, LCP

David Fairs

David is a Partner at LCP and was the former Executive Director of Regulatory Policy, Analysis and Advice at The Pensions Regulator. During his time at the Regulator he was involved in many high-profile policy issues including the development of the General Code, the new Funding Code and, of course, was fully immersed in the challenges arising from the September 2022 fiscal event, providing evidence on that to the Work and Pensions Select Committee in December last year.

David is an Honorary Professor in the Department of Management and Marketing at Durham University Business School and is Chair of the Advisory Board for the Pension Policy Institute and Kings College Research Project on collective defined contribution schemes. He is also a member of the Advisory Board to Guiide and an Ambassador for Included.

Douglas Clark, Head of Research and Solutions, Brightwell

Douglas Clark

Doug joined BT Pension Scheme in June 2008 and for the first year he focused predominantly on monitoring and selecting hedge funds. Since then, he has concentrated on the wider investment strategy and manager selection across all asset classes.

From 2004 to 2008 Doug worked at Belgrave Capital Management, the UK subsidiary of a Swiss Bank, researching and selecting hedge funds and long-only equity funds.

Before this he he worked as an Analyst in the trading team at British Energy, working on the renewable energy market.

William McGrath, Founder, UK, C-Suite Pension Strategies

William McGrath

William worked in the City in corporate finance for Lloyds Merchant Bank and Kleinwort Benson before embarking on a 25-year career as executive director of businesses in a range of industries from construction and engineering to consumer products. He has a Modern History degree from Oxford University and qualified as an accountant with KPMG.

For 15 years he was CEO of AGA Rangemaster. The company’s origins date back to the start of the industrial revolution and it has a large pension scheme. His industrial experiences led him to see that if corporates are prepared to ‘get stuck in’ again on pension provision, better outcomes for all stakeholders are possible.

In 2016, William founded C-Suite Pension Strategies which advocates modernising old DB schemes. With well-directed corporate support, schemes can protect members’ interests and align with corporate Section 172, ESG and HR needs.

Breakout room moderators

Steve Hodder, Partner, LCP

Steve HodderSteve is a Partner in LCP’s investment practice and advises both Trustees and sponsoring companies of corporate UK DB pension schemes.  Steve is currently advising a number of large schemes on 'run-on' strategies, actively pursuing surpluses to benefit members and sponsoring employers.

Recently, Steve and colleagues at LCP have been driving forward a new proposition for UK DB pensions. The proposition is to tweak the 'rules of the game' so schemes are incentivised to invest for modest growth, and members are protected through a small extension to the PPF. Together, he believes this can unlock a portion of the £1.5tn of UK DB assets to generate additional returns, benefiting DB members, DC savers and the wider UK economy.

Bill Manahan, Director of Institutional Solutions, Downing

Bill ManahanBill joined Downing in July 2023 as a Director of Institutional Solutions. He has a wealth of experience in the institutional space - private markets, risk management - across fundraising and business development. He holds a degree in Commerce from University College Dublin and has a post graduate diploma in Law from the Department for international Trade (DIT).



Paul Kitson, Partner, Ernst & Young LLP

Paul Kitson

Paul is an Actuary and Partner at EY, and is UK Head of Pensions Consulting, a team of over 100 actuaries, investment consultants, governance experts and data scientists.  Paul has worked with some of the largest pension schemes and their corporate sponsors in the UK, including on a number of ground breaking transactions.

Paul is currently advising a number of clients on run-on strategies and how these can be delivered in an equitable way to all stakeholders, including members, trustees, and company sponsors.

Host

Karen Shackleton, Chair & Founder, Pensions for Purpose

Karen ShackletonKaren has worked in the finance sector for over 30 years. As well as being Founder of Pensions for Purpose, she is Chair of the Strategic Investment Board for the Ministry of Justice and a Non-executive Director and Chair of the Board of Resonance Ltd, a social impact investment company. She sits on the Advisory Council of the Impact Investing Institute.

Karen also provides independent investment advice to the London Boroughs of Islington, Camden and Hounslow through Apex Group. She was the Chief Executive/Managing Director of AllenbridgeEpic Investment Advisers from 2010 to 2013. Prior to that, she had ten years’ experience as a fund manager and director for County NatWest and BZW Investment Management (now BlackRock).

Panel Chair

David Brown, Senior Director & Training Lead, Pensions for Purpose, Independent Professional Trustee

David BrownDavid has worked in the pension and financial services industry for over 35 years with both UK and international experience. As well as being Senior Director & Training Lead at Pensions for Purpose he is an accredited professional pension trustee. His trustee appointments include schemes with FTSE 100 and FTSE 250 sponsors and with the Smart Pension Master Trust. He has broad investment, risk management and operational experience across both defined benefit and defined contribution schemes. David has a particular interest in ESG and climate change, and holds the CFA certificate in ESG Investing. He is also a Fellow of the Pensions Management Institute.

David’s prior experience includes senior management roles with Tesco, where he was UK and ROI Head of Pensions and Payroll Manager, professional service firms including Deloitte and KPMG, and Fidelity Investmentsin the US.

Pensions for Purpose

Pensions for Purpose exists as a bridge between asset managers, pension funds and their professional advisers, to encourage the flow of capital towards impact investment. Our aim is to empower pension funds to seek positive impact opportunities and mitigate negative impact risks.

Our Community allows members to learn from leaders in the impact investment industry. We provide a trusted environment to interact, collaborate and share knowledge. Members engage in a programme of activity to shape their strategy in ESG, sustainable and impact investments.