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6.
Expected Return
The Trustee expects to generate a return on the assets, over the long term, in excess of that which would have been achieved if a minimal level of investment risk had been taken within the portfolio, i.e. if the assets had been invested solely in a portfolio of long dated UK Government debt appropriate to the nature of the Scheme’s liabi lities. It is recognised that the Scheme’s investment performance may deviate significantly from such a minimal risk level of return.
7.
Additional Voluntary Contributions (AVCs)
Additional Voluntary Contributions are separately invested.
The Trustee periodically reviews the appropriateness of the AVC funds with the assistance of their advisors.
8.
Cash at Bank
A low balance of assets is also held in deposit and current bank accounts to facilitate benefit payments.
9.
Realisation of Investments
The investment managers have discretion in the timing of realisation of investments and in considerations relating to the liquidity of those investments within parameters stipulated in the relevant appointment documentation.
The Scheme ’s a ssets are held in funds and securities that are believed to be readily realisable.
10.
Environmental, Social and Governance Considerations
The Trustee believes that environmental, socia l and governance (“ESG”) factors , including but not limited to climate change, are potentially financially material over periods extending out to the funding of all benefits, and therefore have a policy to consider these, alongside other factors, when sele cting or reviewing the Scheme’s investments. The Trustee will be reliant on the information presented by the investment managers and their investment advisors regarding the extent to which an investment manager allows for ESG in making their investment decisions. Furthermore, an investment manager’s excellence in this area will not take precedence over other factors, including (but not limited to) historical performance or fees. For the investments held in pooled funds, ESG considerations are set by each of the investment managers. The Scheme’s investment managers will ultimately act in the best interests of the Fund’s assets to maximise returns for a given level of risk.
For the investments held in segregated portfolios, the Trustee delegates ESG considerations to the investment managers such that it helps the portfolio to achieve its objective.
The Trustee believes that ESG issues are not financially material to the risk-adjusted returns achieved by the Scheme’ s LDI strategy, given its sole purpose is to provide a hedge against the Scheme’s exposure to movements in nominal interest rates and inflation.
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