Solutions for every stage of a pension scheme’s life cycle
LGIM is one of the largest pension fund managers in the UK, supporting DB pension schemes on their journey towards endgame. We understand how important it is to strike the right balance between short and long-term objectives. And we work closely with our clients to manage the necessary risks as they strive to pay members’ pensions, maintain funding levels, and reach their endgame.
The UK defined benefit pension scheme landscape is constantly changing. Although the challenges facing each individual scheme are unique, there are themes which will be common to most schemes:
- As schemes mature, they are becoming increasingly cashflow negative, which makes it harder to balance competing requirements for portfolio liquidity
- Risk management becomes the focus and trustees will need to understand what this means for the types of investments they should hold
- Schemes are increasingly seeking to incorporate ESG factors and responsible investment considerations into portfolios
- The changing economic and market background will influence sponsor contributions, asset performance, and the behaviour of members who are deciding when to take retirement
- Many schemes are still at the stage in the journey which requires them to grow their assets and improve funding levels
At LGIM, we combine our extensive asset management and insurance expertise to manage each scheme’s journey to endgame, using the strategies most appropriate to their particular circumstances.
At every stage along the journey, we aim to help our clients manage their schemes as efficiently and as sustainably as possible, reflecting our broad ESG investment capabilities as part of our purpose to create a better future through responsible investment. Our scale and breadth of offering and expertise enables us to work with schemes of all sizes, helping to create efficient solutions for each.
Solutions outlook 2024: What lies ahead for DB schemes?
In this outlook we set out key themes for the year ahead, including renewed focus on credit allocations, hedging, falling longevity and equity derivative strategy.
The value of any investment and any income taken from it is not guaranteed and can go down as well as up, and investors may get back less than the amount originally invested. The risks associated with each fund or investment strategy should be read and understood before making any investment decisions. Further information on the risks of investing is available from LGIM’s Fund Centres.