The Bus Section of the FirstGroup Pension Scheme (BSFGPS) and The First UK Bus Pension Scheme (FUKBPS) recently published their Annual Implementation Statement, covering the year to April 5, 2025. This document outlines key actions taken to manage financially material risks and implement policies from their Statement of Investment Principles (SIP).
Strategic Asset Allocation Refined
For the fiscal year ending April 5, 2025, the Trustee of the Bus Section of the FirstGroup Pension Scheme (BSFGPS) established a high-level asset allocation. This allocation targets approximately 20% in growth assets (private equity and real assets), approximately 40% in cashflow generating assets (bonds, asset-backed securities, secured finance, private debt, and buy and maintain investment grade credit), and approximately 40% in cash and liability matching instruments. This allocation was set after consulting with the Company. The Trustee reviews the growth/matching split periodically and following each actuarial valuation to set an appropriate level of risk and return. (Source: Annual Implementation Statement, page 3)
Private Debt Fund Fully Redeemed
In Q2 2024, the Macquarie Infrastructure Private Debt Fund was fully redeemed. The proceeds from this redemption were directed to the Sterling Liquidity Fund held with LGIM. This action was taken with the objective of decreasing risks related to growth assets. (Source: Annual Implementation Statement, page 4)
Manager Engagement and ESG Integration Focus
The Trustee continues to monitor and engage with its investment managers on ESG integration. The Investment Committee met with Stafford, WTW, and BlackRock during the reporting period. The Trustee receives an “impact assessment report” from its investment adviser annually, detailing managers’ approaches to integrating ESG factors and providing ESG and Climate scores for each manager. Where managers fall short, actions are identified for the investment adviser to engage with them. The Trustee is also looking to improve the overall level of ESG integration across the Section’s assets. (Source: Annual Implementation Statement, page 4, 9)
Specific Manager Actions Identified for ESG Improvement
For LGIM LDI, actions include introducing a formal ESG training program and expanding their approach to evaluate green gilts. For LGIM Sterling Liquidity Fund, actions include introducing a formal ESG training program, increasing GHG reporting coverage to above 70%, and reducing temperature alignment to below 2 degrees. For LGIM Absolute Return Bond Fund, actions include engaging with a greater proportion of issuers annually and utilizing third parties to independently verify ESG data. For AXA Global Secured Assets II Fund, actions include providing examples of effective engagement strategies, centralizing ESG engagement efforts, improving Net Zero commitment coverage, incorporating ESG factors into quarterly reporting, and partnering with academic institutions. For BlackRock Diversified Private Debt Fund, actions include introducing formal firm-level stewardship objectives, committing to a Net Zero target, providing examples of engagement initiatives, enhancing fund-level GHG emissions coverage, producing fund-level sustainability disclosures, and reconsidering CA100+ and NZAMI membership. For WTW Private Equity, actions include considering explicitly separating social scoring from ESG integration, providing examples of fund-level engagement activities, and reporting on ESG metrics at least annually. (Source: Annual Implementation Statement, pages 9-12)
Planned Disinvestment from Timber Fund
No actions were required for the Stafford SIT VI Timber Fund as the Trustee plans to disinvest from the Fund in 2025 as part of a fund range restructuring. (Source: Annual Implementation Statement, page 13)
Source