We are thrilled to announce that we will remain signatories to the UK Stewardship Code after review of our report and assessment against the Code.

Isio’s Stewardship Report

This is Isio’s fifth report on the 2020 UK Stewardship Code principles. In this report, we set out our approach to the six principles applicable to service providers.

Sustainability and active ownership are at our core, guiding our advice to clients to manage sustainability risks, maximise long-term risk-adjusted returns, and capitalise on sustainability opportunities.

In this report, we highlight our focus areas over the year to 31 October 2025, as well as
actions taken since our submission from last year.

We are thrilled to announce that we will remain signatories to the UK Stewardship Code after review of our report and assessment against the Code.

Isio’s Stewardship Report

This is Isio’s fourth report on the 2020 UK Stewardship Code principles. In this report, we set out our approach to the six principles applicable to service providers.

Sustainability and active ownership are at our core, guiding our advice to clients to manage sustainability risks, maximise long-term risk-adjusted returns, and capitalise on sustainability opportunities.

This report details our areas of focus in the year ending October 2024, highlighting actions taken in response to commentary from the Financial Reporting Council (FRC) on our previous submission.

This year Isio will be marking International Women’s Day by holding a lively, thought-provoking and interactive panel discussion around this year’s theme – Inspire Inclusion, with the aim of cultivating local conversations around diversity, inclusivity and empowerment across Isio’s 10 offices in the UK.

Isio’s Women’s Network has brought together a great panel of amazing people to take part in this event:

• Gamiel Yafai – co-founder and CEO of Diversity Marketplace, co-author of “De-mystifying Diversity” and global diversity speaker.
• Kate Miles-Roberts – an expert in people development and an executive coach.  Kate is fascinated by how companies can best create the conditions for people to do their best thinking and believes that our state of mind dramatically influences our thinking and interactions with others, which in turn affects our likelihood of success.
• Karen Parker – a Partner in Isio’s Actuarial and Consulting team and one of the Partner sponsors for our Women’s Network. Karen has held a number of People and Talent roles throughout her career and strongly believes that diversity is key to success.

The session be addressing a range of themes around diversity and inclusion – why it is important, what we mean when discussing diversity, equity and inclusion and how we can all improve our allyship.

Our Isio colleagues have also shown their support for International Women’s Day by sending in photos from across the offices of our teams holding the #Inspire Inclusion pose.

We are thrilled to announce that we will remain signatories to the UK Stewardship Code after review of our report and assessment against the Code.

Isio’s Stewardship Report

Isio’s third report on the 2020 UK Stewardship Code principles is a key reference point in defining our stewardship approach to the six principles relevant to service providers.

Sustainability and active ownership are at our core, guiding our advice to clients to manage sustainability risks, maximise long-term risk-adjusted returns, and capitalise on sustainability opportunities.

This report details our areas of focus in the year ending October 2023, highlighting actions taken in response to commentary from the Financial Reporting Council (FRC) on our previous submission.

• As UK government gilt yields continue to rise, Isio’s Low-Risk Funding Index shows that the aggregate funding position further improved to 108% as at 31 October 2023
• Funding positions for LGPS funds and their participating employers remain very strong, providing opportunities to review funding and investment strategies currently in place
• For the first time, results for each of the 87 participating funds have been released (both at 31 October 2023 and 31 March 2022)
• Many employers participating in the LGPS (Scotland) continue to be offered contribution rate reductions as part of the 31 March 2023 valuations, raising the question – should LGPS (E&W) employers benefit from similar reductions?

The latest release of Isio’s Low-Risk Funding Index suggests that the aggregate funding position for the 87 funds participating in the Local Government Pension Scheme (LGPS) in England and Wales has improved from 107% at 30 September 2023 to 108% at 31 October 2023, representing an improvement of over £2bn. The funding level peaked at 110% part-way through the month of October.

The improvement is due to an increase in UK Government bond yields which reduces the value of low-risk liabilities, partially offset by small reductions to asset values.

Of the 87 participating funds, 55 have funding levels of 100% or higher, with levels ranging from 67% to 157% funded.

The results show that funding levels for LGPS funds and their employers remain consistently much higher than 31 March 2022 levels, which were used to set funding and investment strategies that may no longer be appropriate under current conditions.

For the first time, results for each of the 87 participating funds have been released on a named basis, allowing funds to compare their relative position on the low-risk funding basis. The analysis also sets out the comparative position as at the previous actuarial valuation date of 31 March 2022, demonstrating the significant fund-specific improvements when assessing liabilities on a low-risk funding basis.

• Growth in the number of mandates has stalled post gilts crisis and FMs feel impact of dramatic decrease in clients’ assets under management
• With a large proportion of schemes with assets under £100m, FMs adapt their propositions to attract smaller mandate sizes – introducing competitive fees and simpler portfolios
• Portfolios are shifting. The gilts crisis has made its mark, with a greater focus on liquidity through liquid alternatives and equities to support collateral for liability hedging
• Looking forward, it is expected new schemes will enter the FM market to support their trustees with governance and to ease operational burden

In 2023, the fiduciary management market has continued to be tested as the consequences of the gilts crisis have played out across the wider pensions industry. A key challenge this year has been in the requirement for fiduciary managers (“FMs”) to source capital for LDI (“Liability Driven Investment”) portfolios to maintain liability hedging targets. However, gaining access to liquidity proved difficult for some.

Recognising change in the market, FMs took the opportunity to evolve their offerings. Smaller clients have been able to enter the market due to competitive fees and simpler portfolios. The make-up of portfolios has been adapting, with liquid alternatives and equity rising in desirability, over illiquid alternatives and credits which were popular in recent years. 71% of schemes with FMs also carried out strategy reviews over the course of the year.

Isio’s annual FM survey ‘Latest trends in Fiduciary Management’ shows the impact of challenging market conditions for fiduciary managers. The impact of the gilt yield rises was prominent in 2022 and 2023, with falling assets under management (“AUM”) in both years. In 2023, for the first time since the survey began in 2008, the number of schemes using FM (including full and partial FM mandates) has declined.

13 November 2023: Enplan, operated by Entrust and Isio, is introducing a new innovative investment service to its clients through Schroders to enhance its operational consolidation solution for defined benefit (DB) pension schemes.

The new approach will boost Enplan’s investment, monitoring and digital reporting capabilities, providing access to a market leading investment proposition built bespoke for clients and normally only available to much larger schemes. Enplan schemes will benefit from Schroders’ advanced Liability-Driven Investment modelling and access to a range of proven asset managers through an open architecture that ensures best in class manager selection in each asset class.

Enplan was established by independent trustee company Entrust and pensions advisory firm Isio in 2017. It provides smaller DB pensions schemes with a one-stop-shop governance and operational solution that saves schemes time and money, while enabling them to retain their original independent legal structure and identity. Enplan has now onboarded more than 50 schemes and is responsible for close to £1.5bn of DB pension scheme assets.

Enplan was launched in response to a significant consolidation opportunity emerging in the DB marketplace. The Mansion House reforms have since placed an increased emphasis on consolidation for smaller DB schemes, including ‘superfund’ options, which aim to reduce reliance on their sponsoring employer.

Operational consolidators such as Enplan provide economies of scale through bundled services and governance, and have been operating successfully for some time. Now, with a demonstrable track record, they are well placed to capitalise on demand for sophisticated, cost-effective consolidation solutions that do not require an upfront premium to join.

• Isio research reveals less than a quarter of people (23%) think their current employee benefits package meets their needs, with dissatisfied employees 60% more likely to quit their job.
• Older, married homeowners are happiest with their benefits packages, while ethnic minorities are most likely to find their benefits do not meet their needs and move job. A more inclusive approach to benefit design is clearly needed.  
• Employers must evaluate their benefits offer, making sure they give all employees the right benefits for them, and the confidence to understand and use them

9^th November 2023: Employers across the UK could be spending up to £15bn a year on employee benefits that don’t resonate with their staff, according to new findings from Isio and YouGov, who surveyed over 7,000 private sector employees. 

The findings show that there is a strong correlation between relevant benefit provision and employee retention, meaning getting this wrong is expensive, especially in the current labour market. Ethnic minorities were most dissatisfied, evidencing a need for a more inclusive approach to benefit design.

Of those surveyed, just 23% felt their current package meets all their needs, with levels of satisfaction highest amongst older, married homeowners of White ethnicity. Satisfaction levels dropped to 16% and 15% respectively for Asian and Black respondents. This means that three quarters (77%) of employees believe their benefits do not fully meet their needs. Those who are unhappiest with their benefits package often have needs that aren’t being met through their employer, such as a need for help with debt management.  

The findings also reflect current struggles with the cost of living, with more than half (56%) of respondents admitting that they felt negatively about their imminent financial future and 79% of respondents making spending reductions in the first half of 2023.

Employer support within the benefits package makes a real and meaningful difference; people who felt their benefits package met their needs were 62% less likely to have made cutbacks to their spending, such as shopping essentials and utility bills, over the first half of 2023 than their less satisfied colleagues. While some of this will be driven by those having higher incomes receiving better benefits, Isio’s data shows there is still an underlying factor at play between the benefits package and cutbacks.

• The fast-growing pensions advisory firm has moved its 100-strong team into One Donegall Square South, following its acquisition of Deloitte Total Reward and Benefits Limited

12^th October 2023:  Isio, the fast-growing pensions advisory business, today announces the opening of its new office on the prestigious Donegall Square, near to Belfast City Hall.

Earlier this year, Isio acquired Deloitte Total Reward and Benefits Limited (DTRB). The deal was announced in January and completed in May. DTRB had a strong presence in Belfast and its 100 strong Belfast team are a part of the 200 former DTRB employees who are now part of the Isio Group, which is comprised of more than 1,000 people across 10 office locations.

This is Isio’s first office location in Northern Ireland.

Mark McClintock, partner and head of Isio Belfast commented: “It has been an exciting and busy time since the deal completed in May and preparing for the move to our new prime location, city centre office has been a part of that. We are delighted to have the opportunity to make this space our home. It is the ideal base for the team to continue to grow and cement ourselves as the market disrupter here in Northern Ireland, as Isio has already successfully done in other parts of the UK.

“Belfast is a hub for actuarial talent, much of it coming from Queen’s University. We look forward to welcoming the next generation through the doors of One Donegall Square and offering them exciting career opportunities in this fast evolving sector.”

The acquisition strengthens Isio’s core pensions advisory business and adds new capabilities in areas such as defined benefit consolidation and pensions M&A. The enlarged Isio Group will have annual revenues of around £140 million and will benefit from enhanced scale and greater depth and breadth of expertise, as well as opportunities to expand its range of services.

Isio colleagues who were formerly DTRB employees have now also joined Isio’s existing offices at sites including London, Leeds, Glasgow, Edinburgh, Manchester and Birmingham.

• Isio’s inaugural LGPS (England and Wales) Low-Risk Funding Index reveals an aggregate funding position of 102%
• This marks a transformational funding swing of approximately £190 billion since 31 March 2022, following a significant rise in gilt yields
• However, substantial funding differences remain between the participating funds, with some still significantly underfunded
• The Index suggests that the majority of LGPS funds have scope to reduce employer contributions or shift to lower risk investment strategies
• Future developments of the Index will reveal funding levels for each individual LGPS fund and track the LGPS’s response to these new market conditions
• An equivalent Index is under development for the Scottish LGPS funds
  

11 September 2023: A new index from Isio benchmarks the aggregate funding position for the 87 funds that participate in the Local Government Pension Scheme (LGPS) in England and Wales, revealing that the LGPS is fully funded on a ‘low-risk’ basis.

Isio’s ‘LGPS Low-Risk Funding Index’ estimates the funding position for the LGPS using the pensions industry standard approach to low-risk funding for past service liabilities, namely using a discount rate based on government bond yields. The Index reveals, as at 31 July 2023, that overall the LGPS in England and Wales is 102% funded.

The funding level has improved dramatically since the most recent LGPS England and Wales triennial valuations were carried out as at 31 March 2022, when funding was estimated to be 67% on the same low risk basis (with a corresponding deficit of over £180 billion) and none of the 87 funds had a funding level of 100% or higher. The improved funding level is primarily due to the significant increase in UK government bond yields, which has resulted in the value of liabilities assessed with reference to bond yields falling dramatically.