Investment - Articles - Aligning investment strategy with DB Endgame is vital


DB Schemes that choose to run-on need to clearly outline how funding and investment strategies align with the scheme objectives to avoid key challenges, says Hymans Robertson.

 They have released their latest update to the Excellence in Endgame insights hub: ‘Investment Practicalities of Run-on’, today.

 The paper reviews the key risks that schemes face – including inflation, liquidity, longevity and funding – when adopting a cash driven investment (CDI) approach, which is most frequently associated with schemes looking to run-on. It looks at how the investment strategy can be aligned with the scheme’s long-term objective and overcome some of the challenges of running-on the pensions scheme from an investment strategy perspective.

 Commenting on why DB schemes should review their investment strategy as part of their run-on approach, Sam Hampton, Senior Investment Consultant, Hymans Robertson, says: “If DB schemes are to meet their long-term objectives, and foresee any potential problems that are to arise, its vital that pension schemes carefully design an investment strategy that aligns with their goals. Cashflow driven investment (CDI) is becoming an increasingly popular investment strategy as it enables schemes to meet their funding goals in a controlled risk way. CDI strategies can be designed to maintain a degree of flexibility enabling pension schemes to tailor their approach should client circumstances or market conditions change. Our latest paper explores specific risks and how these can be addressed, ensuring a smoother path towards a scheme’s longer-term objectives.”

 The Hymans Robertson Excellence in Endgames insights hub and decision-making tree can be found here.

  

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