Interview | Morten Nilsson
“We are doing something quite important for society and our members.”
Morten Nilsson, chief executive of the BT Pension Scheme and founder of Now: Pensions, talks to Mona Dohle about
capitalising on volatility, Brexit challenges and how climate change affects the scheme's portfolio.
How has the first year as chief executive of the BT Pension Scheme (BTPS) been? Let’s start with why I was interested in the job. I already knew
our.CIO, Frank Naylor I met him around 10 years ago when I moved to the UK, so I knew that the scheme had already been quite innovative. It had estab- lished Hermes and then sold its majority stake. It had in-sourced the admin, which I thought was quite a bold move and quite a challenge. It had also completed the world’s biggest longevity swap. So the scheme has a history of doing quite ground-breaking and inter- esting things. Because of the size of the scheme, the usual off the shelves options do not quite work. All of that was quite interesting. So I joined and met a team which I thought was competent and has successfully intro- duced all these changes. Over the years, it has built up a strong liability driven invest- ing (LDI) and hedging capability, a small liquids team and a good actuarial team, so quite a lot of core skills. With the sale of the Hermes stake there was
quite a big transition. Hermes initially managed all our HR, external communica- tion and finance, all of that had to be brought in house and I took the opportuni- ty to revisit our overall business strategy. We also had a new chair of the trustee board joining us, Otto Thoresen, who formally took over in March. There have been a lot of changes, but it’s been a good year.
Before joining BTPS, you set up Now: Pen- sions. What was it like moving from a DC scheme to a DB scheme? I worked for ATP in Denmark, which is a DB scheme without a sponsor, so I had a pretty good idea of having pension liabili- ties and how that worked with an LDI approach. I felt pretty used to that way of thinking. But as I said, ATP doesn’t have a sponsor, it is an insurance company, so I hadn’t had that sponsor angle before, and I found it interesting. I should also add that Now: Pensions is a commercial provider competing with other pension funds and we had the joy of build-
18 | portfolio institutional | October 2019 | issue 87
ing something from scratch and seeing that grow to one of the top workplace pensions providers.
It's certainly been different,
coming from an organisation with no histo- ry to one with a lot of history and more than £50bn of assets. BTPS has that sponsor relationship which is important for us. We also have an inter- esting setup in the sense that we are organ- isationally independent from the sponsor, but employees and ex-employees have a close financial link with them. It is a different organisation. Now: Pen- sions was extrovert, BTPS has not been so historically, it has perhaps been a bit more introvert when it comes to external com- munications. So there are different cul- tures. Now: Pensions is on a rapid growth trajectory while BTPS is still growing in as- sets but has been a closed scheme since last year. That of course means that the dynam- ics are different.
It is also quite a different structure where at Now: Pensions we had 1.7 million members with small pots, many of which did not realise they were members of the scheme.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
