Investment strategy

Asset-Liability Management

Pension Insurance Corporation (PIC) holds significantly higher levels of assets than is required to back our commitments as well as a conservative investment strategy, ensuring we are able to pay our policyholders' pensions as they fall due.

We are relentless in managing risk: we play to our strengths, and take action where we have concerns. In practice this means retaining those risks which we are able to control, such as investment risk, and hedging out those (external) risks over which we have no control, such as interest rate, inflation and longevity.

In order to ensure that our asset strategy will continue to provide returns which match our liabilities, we receive a daily report on our asset-liability position and our investment strategy committee meets every week. This takes into account the prevailing economic situation and other relevant factors.

Our results speak for themselves:

• Our assets were invested over 80% in cash and gilts in 2008
• We re-entered the corporate bond market in early 2009
• We have never held more than a couple of per cent of our portfolio in equities

Our assets are reviewed and managed on a day-to-day basis by a selection of the best fund managers in their respective fields.

"We sought a provider whom we considered would provide longevity and effective support to our fund members, whilst also being financially resilient and secure...Within our short-list, the Pension Insurance Corporation team demonstrated the most comprehensive understanding of all our requirements and we are confident we made the right appointment." 

Chairman of the Trustees, Retirement Benefit Scheme of Food from Britain, April 2009