Our client is an immature DB scheme, with a typically diversified investment portfolio.they had a healthy surplus in funding on the "Minimum Funding Standard" (MFS) basis. However, while their Scheme Sponsor supported the Scheme, but their future was uncertain. Our client was mindful that the employer was sensitive to increases in the contribution rate.
Given the healthy MFS surplus in the Scheme, the Trustees asked for our help to de-risk without reducing expected return, while remaining on track from a going-concern perspective.
Our experts proposed a method to quantify and track the opportunity for de-risking. We put forward and alternative investment portfolio to reduce risk without reducing overall return. Going forward this meant that the client had superior liability matching as well as a framework to further de-risk the Scheme as opportunities arise.
We were able to deliver advanced training to the Trustees and other stakeholders to ensure that the new Liability Driven Investment approach and its implications were understood. We directed the implementation of the new investment portfolio, and negotiated reduced fees with the investment managers. We delivered pragmatic advice on the process for transferring assets to the new managers and suggested investment ideas to further diversify and maintain the expected return on the growth assets which were now a greater portion of the overall Scheme assets.
The client now has a clear method to identify and act on opportunities to de-risk their assets, when they are ahead of their investment target.
The improved defensive asset strategy has resulted in better liability matching for our client. This will improve further as the Scheme matures and a greater portion of the overall Scheme assets become invested in the defensive portfolio.
How we can help
Fiduciary management is a hot topic, and has been a focus of the recent CMA review. We ensure that clients fully understand the pros and cons, and help them to put in place the right arrangements for their needs.
In an increasingly complex investment market we focus exclusively on the needs of our clients. We keep abreast of the entire range of investment choices and access options and simply deliver good value best in class advice.
Getting the investment strategy right is the most important task to help ensure good outcomes.
LCP Horizon is a one stop solution to meet your governance, communications and investment needs; enabling you to take effective, measurable actions to help your members.
Our intuitive, real-time pensions technology allows you to see the information you need when you need it, helping you to make decisions.
We help you focus on the areas of most significance, monitoring performance against the benchmark, funding level and manager contribution. This information can enable you to see what decisions have worked and why.