An investment strategy for a fully-funded scheme tends to be relatively cautious – intended to deliver modest growth, but above all designed to protect the funding position.
If the scheme has yet to achieve full funding, a different investment strategy may be required. This will typically offer higher expected returns. But with that comes increased risk.
Investment strategy is complex, and many trustees miss opportunities by failing to review it when circumstances change.
We can help keep your investment strategy in line with overall scheme objectives, striking the right balance between growth projections, expected return and the funding position. We consider two key questions at the start of an investment strategy review:
We can also help you consider how the asset allocation is likely to evolve as the funding position improves over time. This is consistent with the long-term funding target approach that The Pensions Regulator now encourages.
Our investment modelling helps us work with clients to assess their current investment strategy. Is it too risky? Are its expected returns high enough? How would adjustments affect the asset allocation? We can then design a new investment strategy which aligns with current objectives and circumstances, taking the sponsor covenant fully into account.
Once a strategy has been agreed, we help trustees to consider adjustments over time, to ‘lock in’ funding gains as they occur and move progressively towards the long-term funding target.
For us, investment strategy is a conversation rather than a lengthy, indigestible report. Our consultants provide the support and explanations needed as the conversation progresses, focusing on the areas of greatest interest to the trustees.
When discussing investment strategy options with trustees, we work closely with the Scheme Actuary. This will often be a First Actuarial colleague but can just as easily be a third-party actuary.
Our in-house software helps trustees choose between investment strategies.
Get in touch with one of our investment consultants to discuss how we can help you.
We produce regular briefings to update trends on the latest market developments.
Advice is sound and does not over-complicate things, as has been the case with some other providers.
Download our Client Hub brochure.
Concerned about the risk of an Employer contribution increase as a result of high liabilities, Trustees of the Kennel Club Pension Fund turned to First Actuarial.
“They’re extremely professional and helpful. Their input always seems sound, logical and well presented. First Actuarial handled the transition well, they provide us with helpful guidance, and have delivered what they promised when they pitched for the work.”
The Trustees of the Southern Co-op pension scheme had a fiduciary, or delegated, arrangement in place, giving the manager discretion over how to invest the Scheme’s assets to meet the Trustees’ objectives.
"When we met the team on a video conferencing call, we built up a rapport quickly. We were comfortable with them and their fees were reasonable.”
As a result of an unusual clause in their trust deeds, Trustees of the pension scheme sponsored by the Society of British Aerospace Companies (SBAC) funded their liabilities on a buy-out basis.
“First Actuarial are very proactive. They respond quickly and get things done. They have proved to be competent and conscientious, and have a very professional and personable approach to business relations.”