Investments
Investment objective and management
The Trustee set an investment objective to be able to cover the Scheme’s liabilities over a period of time, while taking appropriate levels of risk. It employed BlackRock Investment Management to manage the Scheme’s assets and achieve the funding target required.
In September 2019, the funding target was met and the Trustee, with the full support of Maersk, entered into an insurance contract with Legal & General (L&G), further reducing the investment risk within the Scheme. This insurance contract is in the form of a buy-in policy*, the value of which exactly matches the value of the liabilities it covers.
How is the money in the Scheme invested?
The assets held by the Trustee as at 31 March 2022 are shown below:
| 31 March 2022 | Value | Asset allocation |
|---|---|---|
| £000 | % | |
| Total Portfolio | 1,035,192 | 100 |
| L&G insurance contract | 914,000 | 88 |
| Pooled Investments | 111,951 | 11 |
| Liquidity Fund | 48,010 | |
| Direct Lending Portfolio | 63,941 | |
| AVCs | 8,745 | 0.9 |
| Other investments | 496 | 0.1 |
Following the completion of the insurance contract with L&G, the Trustee reviewed its investment strategy for the remaining assets held directly by the Trustee and determined that its focus should be on protecting the value of these assets, rather than seeking investment return.
In April 2021, the Trustee terminated the successful fiduciary management arrangement with BlackRock and moved the remaining cash held by BlackRock to the L&G Sterling Liquidity fund. It employed Willis Towers Watson as its new investment adviser.
After 31 March 2021, the Trustee sold the remaining hedge funds and transferred the proceeds to the L&G Sterling Liquidity Fund. In July 2022, the Trustee liquidated the direct lending portfolio and invested the proceeds in the L&G Stirling Liquidity Fund. The Scheme’s assets currently comprise of the insurance contract and cash held in the L&G Sterling Liquidity Fund.
The Statement of Investment Principles (SIP) sets out the principles governing investment decisions made by or on behalf of the Trustee. The Implementation Statement outlines how key activities and decisions have helped the Trustees achieve certain policies and objectives set out in the Scheme's SIP.
*A ‘buy-in’ is an insurance policy a pension scheme buys to cover the payment of member benefits that are insured. Its purpose is to reduce the risk of a pension scheme not having enough money to provide member benefits. This could happen if future investment returns on the pension scheme’s assets are lower than expected and/or its members live longer than expected. Under a buy-in policy, a pension scheme’s trustees hold the policy as an asset to meet member benefit payments, receiving money from the insurer each month to pay pensions to beneficiaries. This increases the security of members’ benefits, which is the trustees’ main priority.