I’d like to start my first welcome as the new Chair of the Barclays Bank UK Retirement Fund (UKRF) by thanking my predecessor, Peter Goshawk.
For more than a decade Peter has been a reassuring constant; navigating the Fund through challenging times and overseeing its financial improvement from a significant funding deficit in 2011 to the positive position I am pleased to share with you here.
As for me, I have a background in corporate finance, tax and pensions and although I’m new to the role of Chair I am not new to the UKRF, having been an Independent Trustee Director since 2020. I have experience working with other large UK schemes and bring an impartial perspective to the management of the UKRF. I am excited about the challenges this new role brings.
I’d also like to welcome aboard our newest member-nominated director, Deborah Rees. Debbie is a deferred member and joined us from 1 January 2023.
We remain in funding surplus
In 2021, our interim valuation update showed that the UKRF had a small funding surplus, meaning that we held more in assets compared to how much it is estimated we need to pay everyone’s pension now and in future (our liabilities). I’m happy to report that our latest full three year actuarial valuation shows that the UKRF’s funding position has further strengthened with a £2 billion surplus at 30 September 2022. The surplus provides a buffer against future adverse events such as the recent market volatility.
Our long-term strategy is to align the value of our assets to the expected cost of paying members’ benefits (the value of our liabilities), both of which have fallen over the same period. This means our assets are performing as expected which, combined with our robust risk management strategy, has stood us in good stead through a period of economic uncertainty. A lot can happen in three years and these financial results show the progress we’ve made since our last full valuation at September 2019.
Looking ahead
The 2022 valuation results mean we can shift our strategic focus from removing a funding gap to maintaining a positive balance. We’ll do this by continuing to manage our investment risks and ensuring the money from our assets match our member payments as best we can. With this in mind, we’ve recently insured £7 billion of liability against longevity risk, with reinsurance provided by an insurance subsidiary of Prudential Financial, Inc. (PFI) (NYSE: PRU) of the United States. Like our first longevity insurance transaction, this will help protect the UKRF from the financial risk of any unexpected increase to life expectancy for current pensioners.
We’re continuing to look at all aspects that could affect investment performance, including Environmental, Social and Governance factors. You can find out more about our responsible investment approach in our dedicated Responsible Investment section.
We are also carrying out a comprehensive strategic review of our defined contribution (DC) arrangements, which will look at the investment options we offer to members amongst other things.
Help yourself
There’s essential housekeeping you must do to look after your UKRF pension. For example, if you’ve moved house or updated your mobile number or email address or even changed your name, we need to know. If we don’t, you could miss out on important information about your UKRF benefits or any payments could be delayed.
Fortunately, your pension account is Open all hours so you can update your contact details online, any time you like. You might also be surprised to know about the other things you can do while you’re there.
There’s more to come
One thing you can’t yet do is retire online – we currently rely on paper forms – but we’re working on it. If you’re in a defined benefit section like the 1964 Scheme, you’ll be able to make your retirement choices and fill in your retirement forms online later this year, which will speed up the process and make it easier to claim your retirement savings. If you do decide to retire online, you’ll also notice additional identification and verification checks; these security measures aim to further protect your personal information. Look out for more details in the coming months.
We’ve equalised over 23,000 members’ benefits
By law we need to recalculate some members’ pensions so that men and women are treated the same overall. This is because some members have something called a Guaranteed Minimum Pension (GMP), which is included in their UKRF pension and has historically been different for male and female members. This process is called ‘GMP equalisation’.
Since we started this work, we have assessed over 37,000 pensioner records and paid over 23,000 members a back payment and/or a pension increase. Most members’ payments have been small, but even little payments made to tens of thousands of members add up. By the end of 2022, we’d paid over £13.5 million in back payments.
To find out more about this process, visit our dedicated GMP equalisation pages.
Thank you
Finally, I’d like to thank everyone involved in running the UKRF for their hard work and dedication during what’s been a very busy year. I look forward to working with you in the year ahead on behalf of all members, to make sure the UKRF continues to run effectively.
Eileen Haughey
Chair of the Trustee Board
February 2023