Match...

…the liabilities and/or actuarial investment return

We can reduce your investment risk by matching your liabilities and/or actuarial investment return.If you’re taking a 30-year view, the volatility of equity investment returns need be of no real concern. If your timeframe is more like three to five years for example, it’s a big issue. In particular, with a pension scheme deficit widely recognised as a debt, equity investment volatility can affect the value of your business significantly.This is where our Match solution can be of great value. It’s based on a range of investment solutions that:

• enable the majority of pensions investment risk to be matched
• provide an attractive and convenient trustee governance framework
• can help deliver a return in line with, or above, the growth in your scheme’s liabilities

Whilst pooled or segregated ‘liability driven’ (or ‘LDI’) investments can offer efficient exposure to these features, for our clients, other more tailored solutions may also be worth considering.

For example an investment grade note that delivers an annual return of RPI+2-4% over 7-10 years could be an attractive option. This level of return is specifically designed to help match the assumed actuarial investment return underpinning your pension scheme funding. In this case the bond would be backed by one of the world’s biggest banks which itself subscribes for the first 10% of loss of capital and manages the underlying investments. All fees rank behind your return.

Click here to see how these returns compare with estimated real returns on a mix of equity and bonds

Irrespective of the exact nature of the Match solution appropriate to your scheme and circumstances, we can help develop and deliver a simple way to mitigate equity and fixed income volatility without significant cost - increasing business value.