British Airways is appointing Blackrock Inc. as outsourced chief investment officer for its two defined benefit pension plans. While many U.K.-based pensions have adopted an OCIO model, the agreement is significant due to its scale. The Airways Pension Scheme and New Airways Pension Scheme have combined assets of £21.5 billion ($36.82 billion), making the transfers […]
British Airways appoints Blackrock to manage £21bn pension fund
By Momodou Touray 2
British Airways has appointed BlackRock to manage its £21.5bn pension fund.
The agreement covers the assets directly under management for Airways Pension Scheme (APS) and New Airways Pension Scheme (NAPS) which serve more than 85,000 members.
The partnership will see the transfer of the schemes’ investment management from its in-house provider British Airways Pension Investment Management Limited (BAPIML) to BlackRock.
BA Pensions’ decision to appoint an external investment manager is the first of its kind in the UK pensions industry at this scale.
Due to recent changes in pension regulation, many UK pension schemes are looking externally for investment management capabilities with the scale and resources to take on the challenges.
Intensifying regulation, rising operational costs, and increasingly complex investments were cited by the beleaguered airline.
British Airways Pensions has transferred management of its two main retirement systems totaling nearly $30.4 billion (£21.5 billion) in assets to the outsourced chief investment officer (OCIO) business at BlackRock.
The transfer is among the largest of its kind in the United Kingdom, the firm said Wednesday. The agreement affects assets under the Airways Pension Scheme (APS) and the New Airways Pension Scheme (NAPS), as well as more than 85,000 members.
“This agreement is the necessary next step in the evolution of the Schemes as they look to enhance their respective investment strategies, working toward their funding goals,” Roger Maynard, chair of trustees at APS and NAPS, said in a statement.
BA signs 'first of its kind' £21bn deal with BlackRock pensions-expert.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from pensions-expert.com Daily Mail and Mail on Sunday newspapers.