​New Government Attitude : Bellwether question : Run On 4 Good
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Make 2% per annum of assets available to benefit all stakeholders

Government led by HM Treasury has a new mindset on pensions.  Out goes “reckless prudence” and “the safest graveyard” in favour of productive assets and intergenerational fairness.  Pension consultants and trustees addicted to risk transfers to life insurers are starting to see virtue in “run on”.

 Shareholders, bankers, City Institutions, ESG/ financial rating agencies and past and present employees should all ask this bellwether question which is so telling about trustees and sponsor.

“What is the DB scheme’s long term investment return target?”

Answer A:  Stable at over gilts plus 1.5%

• Scheme can align with productive asset and pro ESG asset allocations.
• Expect 2% per annum to become available in time to benefit the sponsor and past and present employees.

Answer B:  Tapering down towards gilts flat

• Get rid ASAP to the benefit of life insurers is the endgame. Legacy problem.
• Going through the motions on environmental and societal factors. 

 
Respond positively. 

Trustees and sponsor can get stuck in so all stakeholders benefit.
Rewrite the Statement of Investment Principles to add ‘Run On 4 Good’ into the plan.
Avoid falling into the overheated Risk Transfer market.

Read more about the Government / Regulator led approach and the 2% p.a of assets upside opportunity.