Centrica picks Redington as OCIO oversight provider for DB schemes

Centrica, the British energy company, has selected Redington as strategic investment consultant to its defined benefit (DB) pension funds, which will include oversight of the schemes’ recently-adopted outsourced chief investment officer (OCIO) model.

Centrica has three pension schemes with more than 36,000 members and assets totalling approximately £10bn (€11.5bn).

In April 2022 the trustees of Centrica’s schemes announced plans to strengthen their investment oversight by moving to an OCIO model with Schroders Solutions.

In addition to strategic investment insight, journey planning and risk management, as part of the mandate Redington will oversee the implementation of the OCIO’s agreed strategy and provide ongoing oversight and recommendations relating to the evolution of the relationship, it was announced.

Allan Whalley, chair of Centrica pension schemes’ trustees, said: “The move to an OCIO model is an extremely important milestone in the evolution of the three Centrica pension schemes. From the outset, our priority has been to surround ourselves with the right experts who understand the unique nature of the schemes and what’s needed to develop their specific journey plans.”

He said that following a rigorous selection process, “it was clear that Redington’s experience in helping large pension schemes achieve maximum value from OCIOs made them the right provider to support us on this transition and beyond”.

In July Redington announced that Nick Lewis had stepped into the role of managing director to lead the development of the firm’s fiduciary manager, implementation manager and OCIO oversight propositions.

Lewis added: “Trustees are navigating an increasingly complex investment and regulatory landscape. Against this backdrop, the OCIO model has been gaining momentum, giving trustees access to specialist investment research and operational efficiency, whilst allowing them to keep control of important strategic decisions.”

He noted, however, that the OCIO model is “not a silver bullet”.

“It’s critical that schemes also prioritise access to impartial monitoring and input into decision-making. In this way, trustees increase their chances of achieving a ‘best of all worlds’ approach,” he said.

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