Pensions - Articles - Does curency hedging matter for DC pension schemes

 Issues the new paper looks at include the availability of DC-friendly currency hedged funds, questions around the potential added costs to members and the factors which should influence trustee decision-making.

 Joanna Sharples, principal consultant at Aon Hewitt, said: “With DC schemes increasingly exploring investment options on a global basis and using overseas assets both to seek returns and to diversify, it is inevitable that there is the potential for members to be more exposed to exchange rate fluctuations. That presents schemes with the dilemma of how to protect themselves against any adverse currency movements.

 “In addition to that, in this era of political change we believe that currency markets will be increasingly volatile over the next few years rather than less. So now is the time for DC schemes to give this issue serious consideration, to review their options and – if needed – take action.”

 To download the paper click ‘Does Currency Hedging Matter in DC?’ Is available at: