20-20 Trustees have been developing the strategies for the pension schemes they have been involved with and have been planning the end-game for a number of years. We do this collaboratively with the pension schemes’ sponsors to ensure that the strategy is also consistent with the strategy of the business.
We are convinced that this collaborative approach leads to the best outcomes for our pension schemes, because in the majority of cases a sponsor’s covenant to the pension scheme is not just the source of funding but is its long term safety net. As such, strengthening the safety net for a longer period of time, is usually in the interests of all stakeholders including The Regulator and the PPF.
For many years, pension schemes tended to go from valuation to valuation, without too much consideration of what their end goal was. This meant schemes and sponsors were more concerned about actuarial assumptions and what that meant for cash funding, rather than focusing on getting to the end-game in the most effective and cost efficient way.
As schemes mature, and funding and security become more reliant on the asset cash flows to support the liability payments, it is now imperative that all aspects of funding, investment and risk strategy are consistent with a scheme’s end-game.