The Scheme’s primary objective is to have sufficient funds to meet the Scheme’s liabilities when they are due. It aims to do this by:
- investing in a range of suitable assets of appropriate liquidity which will generate, in the most efficient and effective manner possible, income and capital growth to ensure that there are sufficient assets to meet the cost of the benefits which the Scheme provides in its DB arrangement.
- hedging interest and inflation risks to the Scheme’s funding by investing in appropriate gilts, interest and inflation swaps.
- minimising exposure to excessive short-term volatility of investment returns.
- minimising the long-term costs to the Company by maximising the return on the assets, whilst having regard to the risk objectives described above.
The Scheme’s primary concern in setting its investment strategy, is to act in the best financial interests of members and the investment strategy is formulated to support its objective of paying benefits as and when they fall due.
The Trustee believes that companies that effectively manage ESG risks can protect and enhance value by, for example, avoiding risk to their reputation, reducing potential financial liability and by increasing their ability to recruit and retain high-quality staff.