LONDON, November 11, 2024 – WTW has secured five new UK defined benefit (DB) investment advisory appointments over the past 9 months, totalling £30bn in assets. This covers UK DB plans from the insurance, energy and technology sectors, including the IBM UK Pension Plan.
These pension schemes share a common objective. Having reached a high level of benefit security, they desire a more relevant and robust risk management framework that will result in true self-sufficiency, and a better solution for all stakeholders.
As pension scheme funding levels have improved significantly over the past year, maturing DB pension funds are weighing up the merits of long-term run on strategies while they consider surplus sharing flexibilities.
WTW has seen a change in the market with demand for new strategic DB advice, enabling innovation for clients looking for resilient investment portfolios and liability hedging frameworks.
“Trustees and sponsors are beginning to recognise that a continued drive to reduce investment returns may be counterproductive.”
Alasdair Macdonald | Head of GB Investment Strategy, WTW
Alasdair Macdonald, Head of GB Investment Strategy, WTW said: “Trustees and sponsors are beginning to recognise that a continued drive to reduce investment returns may be counterproductive. There is good logic to retaining a modest amount of investment return as part of a broader risk management framework which accounts for funding risks.”
Dave Aleppo, Managing Director in WTW’s Investments business, said: “We are delighted to have received the support and validation of our new strategic proposals from such high-profile UK pension schemes. In partnering with more DB schemes, we are confident that, together, we can provide greater security for members and certainty for sponsors.”
A related article recently published by WTW, entitled Does low risk always mean 'low return'?, explores the importance of integrating funding-related risks into decision making when managing low-risk pensions schemes. It cautions against the danger of excessive de-risking in investment strategies and of managing the wrong risks, which can lead to low returns without materially diminishing overall risk.
WTW’s Investments business is focused on creating financial value for end investors through its expertise in risk assessment, strategic asset allocation, fiduciary management and investment manager selection. It has over 900 colleagues worldwide, more than 1,000 investment clients globally, assets under advisory of over US$4.2 trillion and US$167 billion of assets under management.
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
