Given the current economic climate the Trustee is pleased that the latest actuarial valuation of the Scheme, carried out in September 2019, revealed the Scheme was in a strong funding position, which enabled the Trustee to enter into an insurance contract, known as a ‘buy in’ with Legal and General in November 2020.
A buy in is an insurance policy bought to cover the payment of all member benefits - this includes those due now and in the future. Its purpose is to reduce the risk of not having enough money to provide member benefits, which could happen if future investment returns on the Scheme’s assets were lower than expected and / or its members live longer than expected.
The buy in policy is held as an asset to meet member benefit payments and the Trustee receives money from L&G each month to pay pensions to beneficiaries. This increases the security of members’ benefits, which is the Trustees’ main priority.
Following the buy in the Trustee liquidated the direct lending portfolio in July 2022, further reducing risk, and invested the proceeds in the L&G Stirling Liquidity Fund. The Scheme’s assets currently comprise of the buy in insurance policy with L&G and the cash held in the L&G Sterling Liquidity Fund.
I hope you welcome the added security provided by the insurance buy in policy.
Find out more about the Scheme’s financials along with a summary of the latest accounts by visiting the financial pages.
You can also find out more about your Scheme benefits, your retirement options and who runs the Scheme.
Nigel Pusey | Chair
Maersk RBS Pension Trustee Ltd