State Street has won a mandate to service the UK’s Pension Protection Fund (PPF) – a statutory corporate body, established under The Pensions Act 2004, to perform a role similar to the Pensions Benefit Guaranty Corporation (PBGC) in the United States.
The PPF will assume the assets and liabilities of qualifying UK private sector defined benefit pension schemes, which are in deficit at the time of being wound up, usually as a result of the corporate sponsor’s liquidation. The Pension Protection Fund became operational on 6 April 2005.
State Street will provide investment servicing to all of the Pension Protection Fund’s assets. Under the terms of the mandate, these services will initially include global custody, fund accounting, transition management, and cash management services. WM Performance Services, the European performance measurement division of State Street, will render performance measurement services.
“We are delighted to have awarded this mandate to State Street at the end of an extensive and highly competitive selection process,” says Partha Dasgupta, chief investment officer of the Pension Protection Fund. “We feel that the quality of their team and their commitment to all aspects of the investment servicing business set them apart from their competitors, and we look forward to establishing a strong relationship.”
“The Pension Protection Fund is an important new entrant on the U.K. pensions landscape, which makes this mandate a very strategic piece of business for us to win,” adds Alasdair Reid, head of State Street’s Asset Owner Group in Northern Europe. “Our leadership in providing investment servicing and management solutions to the UK pensions industry continues to expand, and we very much look forward to helping the Pension Protection Fund as it develops in the coming years.”
Mercer Investment Consulting assisted the Pension Protection Fund in its selection process. The fund’s assets will be serviced from State Street’s operations in Edinburgh.