National Grid outsources pension fund management

National Grid is to outsource the fund management of its defined benefit (DB) pension scheme’s assets. 


The organisation, which runs the power network in England and Wales, took the decision to implement a new stratgegy following a review of its investment and governance model.

The board of trustees of the National Grid UK Pension Scheme will outsource three-quarters of its pension scheme through the sale of its £17 billion in-house Aerion Fund Management, which was set up in 1987 to manage pension obligations.

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Some 25% of the DB scheme, which closed to new members in 2002, is already run by external managers.

National Grid has appointed Fenchurch Advisory Partners to advise on, and support, the process.

The firm will also set up a team of specialists to support the trustees in active management of the scheme’s assets, close monitoring of its liabilities and control of its investment risks.

In a statement National Grid said: “The sale of Aerion will have full regard to protecting the assets of the scheme and will seek to procure the best possible outcome for all [members].”