The primary objective of the Funds is to ensure that there are sufficient funds available to meet all pension and lump sum liabilities as they fall due for payment.
The funding objectives for each Fund are documented in the Committee’s Funding Strategy Statement, which is reviewed at least triennially. The funding objectives, together with the rates of return being targeted and levels of risk to be tolerated, are central to each Fund’s investment strategy and govern the allocation across various asset classes.
The investment objectives of the Funds are to achieve a return on Fund assets which is sufficient over the long term to meet the funding objectives as outlined in the Funding Strategy Statement. Investment returns are generated by a combination of income (from dividends, interest and rents) and gains or losses on capital.
In effect, the Funds’ objectives are to generate sufficient long term returns to pay promised pensions and to make the scheme affordable to employers now and in the future, while minimising the risk of having to increase contribution rates in the future.
The full Statement Of Investment Principles can be found here and covers our policy on the following:
To provide suitable investment strategies for the differing employer requirements, the Fund currently operates four investment strategies.
The investment strategy for the Scottish Homes Pension Fund is designed to minimise funding level risk.