Investment performance update (SHAPS DB) - June 2016

News | Updated: 07.06.16 Share this:

Each quarter the Committee receives an investment performance report to monitor the performance of the defined benefit (DB) assets.  

Investment returns were steady over the quarter, and with Scheme liabilities falling it was a positive quarter for the funding level. However, over a five year time frame, whilst performance has been strong compared with benchmarks, returns have failed to keep up with rising liability values.   

The table below shows a summary of the DB scheme asset returns to 31 December 2015: 


Quarter ended
31 December 2015

12 months ended
31 December 2015

5yearsended 31 December 2015




8.0% p.a.




7.6% p.a.

Liability Proxy



9.9% p.a.

*The ‘liability proxy’ illustrates how the value of reserves required (i.e. liability value) for an average pension scheme has changed during the periods shown above. The liability proxy cannot however give the complete ‘SHAPS’ picture as it does not specifically track the movements in the SHAPS’ liabilities and takes no account of changing valuation assumptions. It helps us to understand how the Scheme’s funding level (i.e. assets divided by liabilities) has moved (e.g. if the liability proxy return is lower than actual asset returns, then the Scheme’s funding position will tend to have improved).

The Scheme’s overall investment strategy will be reviewed on completion of the Scheme’s 2015 valuation.

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