The last decade and more provided one of the most challenging environments for defined benefit pension funds with pressures coming at them from almost every angle.
Investment Markets. Through falls, recovery, the credit crunch collapse and gilt yields historic lows, there have been incredible pressures on scheme funding levels and as a result many schemes have closed to new members, future accrual and some have been wound up. Nearly all that remain currently have a funding deficit.
Regulation. The Pensions Regulator has increased the pressure – shorter time horizons for deficit recovery periods, increasing reviews of Employer covenants to ensure they have sufficient funds and are setting fair levels.
Governance. Trustees’ knowledge and experience is being tested to the full on top of all other demands on time and expertise. The big question is whether standard quarterly meetings are sufficient to meet (and react to) the level of decision making required.
Cost pressures are immense, with little evidence of fund managers or professional advisors either cutting their costs or finding ways to help Trustees effectively and efficiently deal with the challenges they face.
All of this comes at a time when businesses themselves are facing the challenges of double dip recession, rising prices and the need to contain costs.
Dealing with the above requires an innovative answer to the problem. We have seen many offered but few (if any) seem to have either caught the imagination of Trustees or indeed worked.
Through the JLT Investment Platform, which combines the skills of both JLT Investment Consulting and JLT Investment Management, we believe there is a solution that overcomes the vast majority of the above challenges. It requires innovation at each part of the investment cycle:
In the way that managers are employed and ‘put together’ to manage the assets;
in the way risks are assessed and strategy set; and
in the way that a plan is structured to change the investment strategy over time as the funding position improves.
With so many challenges, it is not possible for a single innovative idea or approach to the problems to be sufficient.
A combination of several approaches is required in order to provide the answer and solutions require a radical re-think at every stage of the investment cycle, leading us to establish the JLT Investment Platform.
Contact us for more information on the distinct aspects of the JLT Investment Platform, each independently available but importantly, which we can operate in different combinations to provide a complete solution.
John Finch, Director | T: +44 (0)161 253 1168 | E: firstname.lastname@example.org