Sixty Second Summary
Question time for your investment objectives and beliefs
29 Apr 2019 - Estimated reading time: 1 minute
- Well governed pension funds have several common attributes. These include clear and quantifiable investment objectives, well defined investment beliefs and the ability to prioritise.
- Pension Committees should revisit their Funds’ objectives to ensure they remain appropriate given their latest funding position and maturity profile.
- Investment beliefs should also be revisited. Checks should take place to confirm the beliefs are aligned to the Committee’s latest thinking and are reflected in the Fund’s investment arrangements.
Setting out your priorities
English and Welsh LGPS funds are now in their 2019 valuation process. On the back of the strong asset returns over the three-year valuation period, funds may potentially see changes to both employer contribution rates and maturity profile. These changes have potential implications for funds’ investment arrangements. When considering what these implications might be, it is important that Committees take time to consider what “success” looks like for them and the key areas to focus on to help achieve this success and, just as importantly, maintain this success.
We have set out the key areas in relation to the investment governance that we believe funds should focus on to achieve success (chart to the right - it is worth noting that we have excluded an explicit reference to Responsible Investment, as this sits across each area). Evidence shows that well-governed pension funds prioritise these areas to achieve superior outcomes, with objectives and beliefs being the key starting points.
In this 60 second summary, we explore key areas to consider under Objectives and Beliefs including setting a number of questions that Committees should be asking themselves. We will discuss the other aspects shown in the chart in future 60 second summaries.
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