CARRIER (UK) PENSION SCHEME YEAR ENDED 31 DECEMBER 2020
NOTES TO THE FINANCIAL STATEMENTS
Pooled investment vehicles analysed by type of arrangement are as follows;
2020 Value
2019 Value
Legal nature of pooled investment vehicle
UK unit-linked insurance contract Jersey domiciled unit trust UK domiciled UCITS OEIC Irish domiciled UCITS OEIC Luxembourg domiciled UCITS SICAV
83,530
77,998
3,596 2,505
4,325 4,221
756
843
3,345
4,359
93,732
91,746
Market risk: interest rates
The Scheme is subject to interest rate risk because some of the Scheme’s protection portfolio comprises bonds and interest rate swaps, either as segregated investments or through pooled vehicles, and cash. Under this strategy, if interest rates fall, the value of protection assets will rise to help match the increase in actuarial liabilities arising from a fall in the discount rate. Similarly, if interest rates rise, the protection assets will fall in value, as will the actuarial liabilities because of an increase in the discount rate.
Market risk: currency
The Scheme is exposed to currency risk because some of its investments are held in overseas markets, either as segregated investments or via pooled investment vehicles. The investment managers manage overseas currency exposure through a currency hedging policy.
Market risk: other price
Other price risk arises principally in relation to the Scheme’s return seeking portfolio which includes equities, absolute return and diversified growth funds, all held in pooled vehicles. The Scheme manages this exposure by investing in pooled funds that invest in a diverse portfolio of instruments across various markets.
At the year end, the Scheme’s exposure to investments subject to other price risk was:
2020 Value
2019 Value
Equity PIVs
72,554
69,615
Diversified Growth Fund PIVs Absolute Return Fund PIV
3,596 2,505
4,325 4,221
78,655
78,161
26
Made with FlippingBook Converter PDF to HTML5