3.7 The ABCs are managed directly by the Trustee and are not held in the CIF. The Trustee undertakes a monthly valuation of the ABCs, with an independently audited valuation obtained annually.
3.8
The Trustee’s main investment objectives are set out below:
• To maintain a level of assets that, together with the support of the participating employers, the guarantee and the ABCs, allows benefits to be met in full when they fall due.
• To target a level of return consistent with the Trustee’s ongoing funding plan and the de-risking framework.
• To use the investment strategy to appropriately constr ain volatility in the Scheme’s funding position, taking account of the nature of the employer covenant, inclusive of the guarantee.
• To adjust the investment strategy over time in a way that is consistent with the de-risking framework to improve the ability of the Scheme to meet members’ benefits with greater certainty and, ultimately, to bring the Scheme into a position where it has a low dependence on the participating employers and RTX. The target timeframe for reaching this position is the mid 2030’s.
4 Choosing investments
4.1 The Trustee sets a benchmark asset allocation and target hedging ratios expected to meet its investment objectives.
4.2 In setting the benchmark asset allocation and target hedging ratios, the Trustee considers the advice of its professional advisers. The Trustee considers Barnett Waddingham LLP to be suitably qualified and experienced for this role. 4.3 The Trustee will consult the Principal Employer and RTX before amending the benchmark asset allocation and target hedging ratio, reaching agreement where this is required under the guarantee and/or de-risking framework.
4.4 Selection and day-to-day management of the Scheme’s assets is delegated to professional investment managers.
4.5 The investment managers are authorised by either the Financial Conduct Authority and/or the Prudential Regulation Authority and are regulated by the Financial Conduct Authority. The investment managers are responsible for security selection and the exercise of any rights associated with the investments, e.g. voting rights on ordinary shares. 4.6 The suitability of the investment managers is reviewed by the CIF Administrator and the Trustee on an ongoing basis. This review includes consideration of the ability of the investment managers to meet their objectives, as well as the managers’ charges and level of service provision.
4.7 Details of the specific investments held by the Scheme through the CIF are contained in a separate document, the Investment Implementation Pol icy (‘the IIP’) .
UTC (UK) Pension Scheme | Statement of Investment Principles | 22 August 2023
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