LDI crisis: Lessons Learnt and the Silver Linings – Risk Management Lessons, Strategic Asset Allocation Implications and Opportunities for Investment and De-risking further?

Dates:

9 January 2023 17:00 to 10 January 2023 16:00

Venue:

Fanhams Hall, Fanhams Hall Road, Ware, Herts SG12 7PZ

Chairperson:

Various members of the PTC Advisory Committee

Details:

Programme

Monday:

Legal & Investment Update to include Lessons from UK LDI Crisis and Solvency II reforms for insurers and their potential implications

An update on current legal and regulatory changes that impact pension fund investment and governance for DB and DC schemes.
Lessons learnt from LDI crisis
The future for LDI and any de-risking strategies
Broader asset allocation impact going forward.
Managing volatility, especially in interest rates and what should you stress test
Liquidity management going forward
Solvency II reforms for insurers and potential implications/areas of concern for Trustees?

Tuesday:

Silver Linings’ from LDI Crisis – Improved Funding, Achievable Endgames & Strategic Asset Allocation Objectives

With the recent volatility in fixed income market, rising rates and LDI crisis, providing many schemes with improved funding levels, what does this mean for future investment strategy?
Do schemes need less returns now for their ‘growth’ portfolios to achieve their funding targets?
Is your schemes target journey plan or strategic objectives towards a risk settlement solution such as buy ins, buy outs or even consolidation, now closer to being achievable?
How should schemes be considering their forthcoming valuation and assumptions?
How should schemes be considering their illiquid allocations?
Does improved funding leave scope to provide discretionary pension increases?

Risk Management – What is a ‘Risk Free Asset’ now, Liquidity Management and Where to look for diversification today?

How should schemes be considering risk management in the context of recent events?
Is there a suitable ‘risk free’ rate/asset today in light of the LDI crisis?
What are ‘good’ diversifiers in your portfolio today?
How do you consider risk and liquidity management in illiquid and real asset portfolios?
Can fixed income now play a supporting role as both a diversifier and return generator in your portfolios?

Keynote Presentation: Steve Webb, former Minister of State for Pensions & Partner, Lane Clark & Peacock, followed by group discussion

Implications of Crisis for DC Default Funds & Decumulation Strategies

In light of the LDI crisis and increased volatility are current DC default funds/strategies really fit for purpose; are they sustainable and offering the best possible value for members’ hard-earned savings as they approach retirement?
With the decline in fixed income portfolios, how has this impacted lifecycle strategies and other decumulation strategies like drawdown in retirement?
With the costs of living crisis, what should schemes be considering now for decumulation strategies that can generate robust income in retirement?
How often should you re-evaluate your default fund strategies?
What is the latest thinking on lifestyle, target date funds, diversified growth funds and other default strategies?