Investment matters The Scheme’s investment strategy sets out how the money that has built up to pay members’ benefits is to be invested. The strategy is set by the Trustee after taking advice from their appointed investment consultants, Barnett Waddingham.
Investment objective and de-risking framework
A large proportion of the assets of the Scheme were invested in the UTC Common Investment Fund (CIF). The investments in the CIF are kept entirely separate from those of the Company. The Trustee has delegated the day-to-day decision-making about our investments in the CIF to the Investment Sub-Committee (ISC). The ISC, with help from its advisers, selects specialist investment managers to buy and sell individual investments in their area of expertise. Our current advisers and managers are listed on the back page. Investing for a better future Increasingly, trustees of pension schemes in the UK are considering environmental, social and governance (ESG) factors when they select their investments. The Scheme’s Statement of Investment Principles (available online at https://online. flippingbook.com/view/359640/10 ) sets out the Trustee’s approach to investments and includes our policy on incorporating ESG into our investment decisions. We are pleased to publish our first Task Force on Climate Related Financial Disclosures (TCFD) report, which is available online at https://online. flippingbook.com/view/667561390 . The report sets out how we assess, monitor and manage the Scheme’s exposure to climate risks and opportunities.
The long-term aim of the Scheme is to be fully funded on a ‘self-sufficient’ basis, such that the Scheme can invest in low-risk assets (e.g. gilts)
that closely match its liabilities. The Trustee regularly monitors the
funding position and has in place a ‘dynamic de-risking framework’ with a system of triggers which enables it to move swiftly to bank gains when there are improvements in the funding position. Moving to a lower target when affordable means less risk is taken and further increases the security of members’ benefits in the Scheme. During the year covered by this newsletter, the Scheme sold investments in equities and target return funds totalling almost half a billion pounds and reinvested the majority of these holdings in lower-risk assets with Insight, Aviva, BlackRock and Legal & General.
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