UNITED TECHNOLOGIES CORPORATION (UK) PENSION SCHEME YEAR ENDED 31 DECEMBER 2024
In the event that more than one pension scheme participates from time to time in the CIF, the Trustee holds separately identifiable assets within the CIF rather than a single holding representing the total value of the combined asset classes. This gives the Scheme flexibility in the selection of asset classes.
The CIF report and financial statements for the year ended 31 December 2024 are appended to this annual report and financial statements.
Throughout 2024 and as at 31 December 2024 the Scheme was the only current participating pension scheme within the CIF.
The investment managers are remunerated through unit pricing or on an invoice basis, based on the value of investments under their management. Where unit pricing results in charges that are greater than amounts agreed between the Scheme and the manager, rebates are received as cash or additional unit holdings. Investment manager fees are reviewed on a periodic basis by the CIF Administrator. In June 2016, the Scheme entered into Asset Backed Funding (ABF) arrangements which involved the investment, through two Special Purpose Vehicles (SPV), in two unsecured, interest-bearing loan notes with an aggregate value of £320m. The ABF/SPV arrangements are held directly by the Scheme and are, therefore, not held or managed within the CIF and are not included in the benchmark asset allocations. The ABF/SPV arrangements were designed with - direct cash flows to the Scheme in certain circumstances. The Trigger-off mechanism is activated when the funding level of the Scheme is equal to or exceeds 95% on an actuarial buy-out basis. The valuation of the ABF/SPV arrangements recognises the expected economic benefit the Scheme derives from the related cash flows. The cash flows largely reflect the profile of payments associated with the loan notes, namely the annual coupon/interest under the loan notes and the bullet (re)payment of £320m at the end of the arrangements in June 2036. The valuation of the ABF/SPV arrangements is dependent upon the probability of the Trigger-off mechanism being activated/deactivated over the period to June 2036. The fair value of the arrangements as at 31 December 2024 amounted to £206.6m. Subsequent to the year end, the Actuary advised that the estimated funding level at 31 December 2024 had exceeded 95%. All the parties to the arrangements agreed that the income and cash flows due to the Scheme in May 2025 would to be paid in full and that the terms of the arrangements would be re-reviewed in detail during 2025.
former defined contribution investments in respect of the Sutrak section are held and managed
by Phoenix Life Limited outside the CIF.
AVC arrangements are managed by the providers shown on page 3 of this report outside the CIF.
investments and considers them to be appropriate relative to the reasons for holding each class of investments. Further details of investments are set out in the notes to the financial statements and in the CIF report and financial statements.
Significant movements of assets between managers and strategies during the year were as follows;
£11.0m was transferred from BlackRock Diversified Growth Fund to BlackRock Secure Income Fund in satisfaction of the final call on the Secure Income Fund.
The remaining balance of the M&G Property Fund (£7.0m) was surrendered in June 2024 with the proceeds being retained for cashflow purposes.
Amounts of £21.0m and £17.0m respectively were transferred from Insight Buy & Maintain portfolio and Legal & General Regional Equity Fund to Insight LDI portfolio as a rebalancing exercise.
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