Investment Strategy for Defined Benefit and Defined Contribution Pension Funds 2018

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Global Macro Trends, Today and Tomorrow

With the global economy showing signs of recovery, investors are starting to ask why and how long this might last. This session will look at the key drivers of growth, today and tomorrow, also touching on a longer term theme relevant for pension scheme investing, the driver of demographic changes on the global economy.

Speakers: James Carrick & Chris Jeffrey, Legal & General Investment Management

Andy’s presentation  will be covering questions such as:

What is the correlation between transparency, truthfulness and trustworthiness?

Why is it vital the financial services sector repairs the reputational damage it has been suffering for decades?

What needs fixing in financial services?

What do we mean by “the transformational power of transparency?”

What is the significance of the UK’s savings ratio to policymaking today?

Why should actuaries be told about the Edelman Trust Barometer?

How can we provide decision-makers with data in a clear and intelligible way?

What role can actuaries play in helping consumers to seek and find value for money?

Is the time right for the actuarial profession embrace a “higher purpose?”

Speaker: Andy Agathangelou FRSA Founding Chair, Transparency Task Force

Equity protection – why now?

Equity markets have had an impressive 9 ½ year bull run following the Global Financial Crisis. Over this time many pension funds have diversified their growth assets, although for many funds equities are still the largest asset risk. With equity protection pricing at attractive levels compared to longer-term history, a number of funds have implemented significant protection strategies in the past 1-2 years. In this session we explore some of the different approaches that can be used to mitigate equity risk.

Speaker: Hemal Popat, Mercer

Actuaries, pension fund investment and the setting of standards relating to governance in the mid-twentieth century

The mid-twentieth century saw a takeoff in occupational pension provision and was also a time during which a range of important standard setting processes relating to the governance of companies, such as standards relating to financial accounting and investment protection were introduced in the UK capital markets.  These standard setting processes were the precursors to the setting of standards relating to governance today. 

In this presentation I draw on the historical evidence to examine the influence of these standard setting processes on the debate within the actuarial profession on pension fund actuarial valuation, its relationship to pension fund investment policy and pension fund financial accounting standards.

By reviewing parallels and contrasts relating to standard setting and investment in a context differing very greatly from the present, this presentation aims to interactively shed new light on a set of familiar questions relating to investment, actuarial valuation and standards relating to governance and examine how answers relating to these questions were provided by actuaries in the mid-twentieth century.

Speaker: Yally Avrahampour, London School of Economics

There is a lot of discussion about the current market for private credit. Is now a good time for pension schemes to increase its allocation to private credit or should they watch whilst other investors buy? This talk will consider the current market for private credit, opportunities and challenges for pension schemes to invest.

Speaker: Gareth Mee and Miria Whittle, Ernst & Young LLP

Biases in Trustee Decision Making: Insights from Behavioural Finance

There is almost no research on the psychology behind the decision-making of pension fund trustees. Our research investigates the behavioural biases that affect trustees’ investment decisions. We first present a comprehensive review of adjacent research in psychology, behavioural finance, and decision-making, to better understand how these biases may lead to sub-optimal trustee choices. Next, we present the results of our empirical research to date. Last, we discuss further avenues of exploration, including remedies to improve decision-making.

Speakers: Leonardo Cohen, City University

Climate Change is a Financial Risk: Are you keeping up, or quietly increasing your professional liability?

Policymakers, financial regulators and lawyers are paying increasing attention to climate change, both in the UK and beyond. This stance supports pension funds who are developing their investment beliefs and practice around the issue.

Other finance sector actors are developing their services to both meet this demand, and to stimulate it. The IFoA issued a Risk Alert on climate change last year. This session will look at a range of policy and regulatory initiatives underway, and offer some ways we might choose to develop our thinking about the role of long term investment. It will specifically seek to stimulate a discussion in the Q&A

Speaker: Mike Clark, Ario Advisory