The Phoenix Group is predicting an increase in companies offloading their defined benefit pension obligations due to the COVID-19 pandemic’s impact on businesses and the economy at large.
Phoenix, which specialises in buying and managing life insurance business closed to new customers, has benefited from the rise in bulk annuity deals, according to a report by Reuters.
“I am yet to meet the finance director of any type of business that is pleased to have a large pension scheme attached to the side,” Phoenix Group CEO Andy Briggs was quoted as saying in the report.
“As we go through this awful pandemic, the desire of finance directors to offload these pension schemes and focus on their core business is greater than ever.”
The collapse of Philip Green’s Arcadia fashion empire drew attention to corporate pension risk, with more than 13,000 jobs and numerous pension scheme payments hanging in the balance.
According to Phoenix, it has exceeded its targets this year, having brought in £1.7 billion (US$2.28 billion) in cash, or more than double that of last year.
Meanwhile, Phoenix recently committed to making its business carbon-neutral by 2025, followed by its investment portfolio by 2050.
The company said that it will ensure that the Scope 1 and 2 emissions of its occupied premises and the Scope 3 emissions from its business travel are net-zero carbon by 2025. It is now a signatory to the Business Ambition for 1.5°C campaign and aims for compliance with the Task Force on Climate-related Financial Disclosures (TCFD).
“It’s absolutely right that we make these commitments which are core to our group’s sustainability agenda,” said Gareth Trainor, Phoenix’s head of investment solutions.
“Just this week we launched a new ESG default solution for Standard Life’s workplace pension clients, which will screen out companies with significant sustainability risks, with exclusions that will include thermal coal and unconventional gas, and UN Global compact violators. It will also include an uplift in green technology solutions by 50% and a reduction in carbon intensity by 50% compared to the parent indices. We will be working with our partners in the years ahead to look at all our solutions, our benchmarks and stewardship, with our important net-zero 2050 commitments front of mind.”
