‘Good investment decisions are important for successful pension schemes’ , says Pensions Expert

Quantum Advisory hosts ‘Pensions for Breakfast’ seminar for industry leaders 

Key figures from the pension and legal industries in South Wales and the South West of England have come together to provide a market overview for business leaders following a recent volatile period.

Pension and investment advisers Quantum Advisory and legal firm Osborne Clarke addressed pension and investment personnel, finance directors and HR managers at Quantum Advisory’s Pensions for Breakfast industry insight seminar.

Speakers included Paul Francis, Principal Investment Consultant at Quantum Advisory; Adam Cottrell, Senior Consultant and Actuary at Quantum Advisory; and Claire Rankin, Partner at Osborne Clarke.

Paul Francis gave a broad market overview noting the recent decline in the performance of gilts, corporate bonds and index-linked gilts alongside increasing inflation and the Bank of England base rate.

Paul said: “Gilt yields have been particularly fickle since September’s doomed mini budget and the subsequent events that followed. Geo-political risks remain and we face a winter of industrial unrest and labour shortages which are causing further uncertainty in the markets.

“Good investment decisions are important for successful pension schemes, so those managing schemes should continue to diversify and monitor investments as longer-term returns look promising for some asset classes.”

Adam Cottrell spoke about market volatility and the effects of increasing inflation and government gilt yields on benefits and pension schemes.

Adam said: “As of October 2022, inflation stood at 11.1% with food and drink inflation at 16.2%. While the Bank of England does expect inflation to fall next year, that doesn’t help people now as the cost of living bites hard.

“There was good news for pensioners as the Government honoured the State Pension triple lock which will see the State Pension increase by 10.1% from April next year.

“As the value of government gilts declined this meant that their yield increased resulting in many defined benefit pension schemes seeing a significant increase to their funding positions. As a result of this, many of these schemes have the opportunity now or perhaps in the near future to secure members’ pensions with insurance companies which is good news for all those concerned.”

Claire Rankin spoke about the Pension Regulator’s (tPR) new single code of practice and the increased power it gives to ensure pension schemes employ an effective system of governance (ESOG).

Claire said: “The new legislation, which is made up of 33 modules, covers six key areas, including administration and communication, and ensures regular internal reviews are completed by individual pension schemes.

“Trustees should audit how their scheme stands against the single code to identify what is being done well, areas that need to be reviewed and set actions to ensure ESOG compliance. A review policy will need to be put in place to regularly review ESOG and schemes with over 100 members will also need to prepare for their own-risk assessment to monitor risk, investment and payment processes.”

Click the Link for a brief video and to hear more about what the speakers said during their presentations. 

Quantum Advisory has offices in Amersham, Birmingham, Bristol, Cardiff, and London and provides pension and employee benefits services to employers, scheme trustees and members. To keep up-to-date with its latest events or for more information about Quantum Advisory, please visit: https://quantumadvisory.co.uk/events.