I’m asked the following question on a daily basis: “What is at the front of mind of pension fund trustees?” or “What are pension funds currently worried about or focused on?”
The short (and slightly unhelpful answer), is ‘a lot’! However, I think the top search terms for October (below) reveal a tremendous amount about what the mallowstreet community is thinking about, concerned with, and what our members are interested in learning more about. Just look at the top four search terms as an example.
Top Search Terms: October 2016
- Generating Yield
- Deficit Funding
- Defined Contribution
- Class Actions
- Direct Lending
- Emerging Markets
- Liability Valuation
- Responsible Investment
For many pension funds a buyout seems like an un-achievable dream, especially now that we seem to be living in world where ‘lower for longer’ is becoming a more commonly discussed reality.
This means that trustees are having to go further afield to find suitable investments that provide the returns needed to help fill ballooning deficits.
On the ‘lower for longer’ point, one of the hottest discussions in the forums in October was the Analysis of the current crisis engulfing defined benefit pension schemes.
It is a discussion that goes to the core of defined benefit pension funds: what do you think about the way in which Defined Benefit liabilities are calculated? In October alone, there were more than 40 responses from community members and close to 500 individual views. Clearly, this discussion has struck a chord, and is far from over.
At the end of last week, I had the pleasure of hosting a roundtable with Dr Bronwyn King and Dr Rachel Melsom of Tobacco Free Portfolios. Tobacco Free Portfolios are a not-for-profit organization, and their mission is simple: to inform, prioritise and advance tobacco-free investment by engaging with finance leaders across the globe.
So far, they have been instrumental in encouraging 35 Australian Superannuation Funds to go tobacco-free, and are now taking their message globally. For me personally, this is a conversation that I’m going to watch with great interest.
I would be interested to understand if your pension fund is thinking about Sustainable Development Goals? Is this something you can take back to your trustee board, or organisation? What are the hurdles or road blocks you would face?
So what’s coming up in November?
There are some very interesting developments in Defined Contribution that we are keeping our eye on – so watch this space!
See you on mallowstreet