The investment strategy of a pension scheme impacts the volatility of the funding deficit and hence deficit contributions. The way in which the assets of a Defined Benefit scheme are invested will have an enormous impact on the cost of funding and financial health of the scheme.
We provide clear advice based on robust analysis to our clients in the following areas:
Our approach to investment advice is based around assisting clients to manage their investments through efficient, effective and transparent investment policy design and implementation.
It is our belief that capital markets are dynamic and financial solutions evolve around this. Investment policy should be equally dynamic, reflecting both scope to capture the changing nature of capital markets and the interaction of funding, investment policy and sponsor covenant.
Our research into capital markets and policy implementation design involves interaction with economists, insurance companies, fund managers and investment banks. Deloitte’s broader consulting capabilities also allow us to draw upon the expertise of other disciplines within the organisation.
We believe that it is essential to work within a governance structure that ensures trustees and sponsors are managing investment risk effectively. There is a point at which the marginal benefit of risk optimisation is outweighed by the introduction of excessive complexity, with the result that decision processes become too long, transparency may be foregone, and ultimately some individuals within the decision-making process become disenfranchised.
Our aim is to manage investment risk appropriately to the identified objectives within the dynamics of market conditions and within a governance framework that suits the time and resources of the client and their in house resource.