The Committee considered a three year de-risking plan to reduce the level of risk within the Scheme's portfolio. The aim of this is to reduce the likelihood of the funding position deteriorating during adverse investment conditions.
In light of the recent positive asset performance, the Committee agreed two stages: firstly, an immediate reduction to the Scheme’s growth asset allocation from 70% to 65%; and secondly to consider, at the December Committee meeting, updated funding level triggers covering the period to the next valuation.
Factors which influence the Scheme’s asset allocation strategy include: the employer covenant, the employers’ attitude to risk and the time horizon for investment.
Employers’ feedback during 2015 and 2016 indicates a desire and appetite to reduce volatility, with a preference to de-risk and, where possible, to eradicate uncertainty at each valuation.
This change to the investment strategy will have no impact on the 2015 valuation outcome.