Morning Devil’s Advocates
Fiona Brown, Head of Group Pensions – Europe, Thomas Cook Group
Fraser Smart, Chief Executive Officer, BA Pensions
Bridget Uku, Group Manager – Treasury & Investments, London Borough of Ealing
08:45 – 08:55
Welcome & Opening Remarks
08:55 – 09:20
Keynote Presentation: The Outlook for DB Funds
Gareth Thomas, Head of DB Pensions Policy,
Department for Work and Pensions
Our speaker will examine the state of the UK DB pensions from a policy perspective. He will cover, among other topics, the new DB funding code, the health of the sector, the significance of headline figures on pension deficits, the degree of latitude that plans have to determine their funding levels, new TPR powers to enforce pensions regulation, how to interpret key elements of the rules, and the main challenges facing both official bodies and the industry.
09:20 – 10:00
Panel: How Funding Shortfalls Map onto Investment Strategy
Moderator
Tony Filbin, Chairman, Capital Cranfield Trustees
Panellists
William Medlicott, Director, ITV Pension Scheme
Eric Taze-Bernard, Chief Allocation Advisor, Amundi Asset Management
Frazer Thomson, Pensions Manager, RBS Group Pension Scheme
Elaine Torry, Senior Investment Consultant, Hymans Robertson
The biggest challenge in DB pensions is not finding the right investments, it’s creating the conditions in which the best investment decisions can be made. Deficits measured by gilt yields place huge pressure on plans to use leverage to buy expensive government bonds.
Are trustees being pushed into bonds when a diversified portfolio of return-seeking assets held over the long term is almost certain to outperform bonds?
Do members want a 100% chance of getting 90% of their benefits, or a 90% chance of getting 100% of their benefits?
And does “de-risking” really reduce risk?
10:00 – 10:20
Presentation: The Economic State of the World
Arif Husain, Head of International Fixed Income, T. Rowe Price
- The ongoing Brexit saga.
- The Trump Factor – all change on geopolitics and trade policy.
- Interest rates inching up – some relief for DB funds?
- The return of inflation and its portfolio consequences.
- Are we near the end of the cycle: where are the risk-off and risk-on plays?
- The investment strategies and products that will help DB plans thrive under the new economic conditions?
10:20 – 10:50
Coffee
10:50 – 11:30
Panel: The Great Win-Win – Assuming More Risk and Doing More With It
Moderator
Caroline Escott, Investment and DB Policy Lead, Pensions and Lifetime Savings Association
Panellists
Kathryn Graham, Head of Strategy Coordination, USS
Ian Mason, Portfolio Manager, AEW Investment Management
David Schofield, President, International Division, Intech Investment Management
As discussed on the earlier panel, funding methodologies have the effect of weighting investment strategies towards conservatism.However, it’s an axiom of investing that you cannot post higher returns without assuming more risk. How often will consultants and actuaries advise plans to do so?
Meanwhile, it is a stated aim of the DWP to facilitate greater investment in alternative assets. If plans assume more risk, based upon more realistic forecasts of expected return, what should the resulting asset mix look like? Specifically, what are the risk-seeking investments that make most sense for DB plans, and in what combination?
11:30 – 11:50
Presentation: Craftsmanship Alpha – Creating Value for DB Funds in a De-Risking Environment
Thomas Kieselstein, Chief Investment Officer, Quoniam Asset Management
At a time when DB schemes are de-risking and simultaneously seeking extra return, our speaker will explore how value can be systematically added through ‘craftmanship alpha’ or skilful implementation, including more advanced factors and multi-dimensional optimisation, in equity portfolios. He will examine how advanced factors, alternative data sets and even artificial intelligence can be used to add value without adding risk.
11:50 – 12:10
Presentation: The Future of Fixed Income – How Innovative Technology Can Yield Better Returns
Jeff Skoglund, Chief Operating Officer – Fixed Income, AllianceBernstein
Fixed income markets are evolving and creating challenges for investors. The market has rapidly expanded, yet inventories and liquidity have shrunk markedly since the financial crisis.
Clients need to ask their investment managers if they can meet three key challenges that could have significant impact, particularly in times of heightened stress; liquidity, scarce alpha and regulation.
Empowering portfolio management teams by integrating sophisticated technology into robust fundamental and quantitative fixed income processes will be key to solving this.
12:10 – 12:50
Panel: The Value Proposition for Social Impact Investing
Moderator
Sally Bridgeland, Chair of the Investments Board, Local Pensions Partnership
Panellists
Peter Hobbs, Managing Director, Head of Private Markets, bfinance
Mark Thompson, Chief Investment Officer, HSBC Bank Pension Trust
Mark Walker, Chief Investment Officer, Coal Pension Trustees
An industry taskforce is working alongside the UK government and regulators to promote social impact investment, and to encourage asset managers to increase the range of products available to investors in this area. Chaired by a leading member of the Implementation Taskforce, the panel will discuss the development and outlook for social impact investing among DB funds, including the costs and benefits, the challenges ahead, and the various approaches that funds and their advisers are advocating.
12:50 – 13:50
Lunch
Afternoon Devil’s Advocates
Kevin O’Boyle, Head of Pensions, BT
Pam Taylor, Group Pension Manager UK & Ireland, BASF
Mark Thompson, Chief Investment Officer, HSBC Bank Pension Trust
13:50 – 14:10
Presentation: Maintaining Performance Under De-Risking Conditions
Bill DeRoche, Chief Investment Officer, FFCM
Traditionally, institutional investors have relied on equities for their returns, while overweighting fixed income during falling and volatile markets. However, the latter strategy has become much less efficient during this sustained period of rock bottom interest rates. Our speaker will explore approaches for de-risking an overall portfolio with a move to alternatives that can be accessed by plans of all sizes, unlike the traditional hedge fund or infrastructure investment structure.
14:10 – 14:50
Panel: What’s the Endgame – Self-Sufficiency, the PPF, Buy-Out, or a Super Fund?
Moderator
Marian Elliott, Managing Director, Integrated Actuarial, Redington
Panellists
Joel Griffin, Head of Global Pensions & Benefits, Rolls-Royce
Jay Shah, Head of Origination, Pension Insurance Corporation
David Taylor, Executive Director & General Counsel, Pension Protection Fund
Luke Webster, Chief Executive Officer, Pension SuperFund
Removing the entire pension liability from the books is very tempting for sponsors, but it can be very expensive.
Do insurance solutions offer the best outcome for members?
If a plan does choose the de-risking route, do Super Funds offer a better option?
Would not a more innovative and return-seeking investment strategy be preferable?
Is the PPF too cautious?
Can insurance and superfund solutions address the inefficiencies of smaller DB plans as well, and the issues faced by weak employers with underfunded schemes?
14:50 – 15:10
Presentation: How Shorter Dated Credit Can Offer Strong Returns With Minimum Volatility
Chris Bowie, Partner, Portfolio Manager, TwentyFour Asset Management
For many years DB pension schemes have been searching for solutions that can provide required returns at low levels of volatility compared with traditional investments. This had led to the prevalence of Diversified Growth Funds as an equity proxy and Absolute Return funds in the fixed income space. Many of these strategies are quite complex and have not always provided the expected results. Our speaker will explore the opportunities available in the shorter dated credit universe that fulfil the same objectives.
15:10 – 15:55
Interactive Discussion: Communicating With Members
Joe Craig, Writer, Quietroom
The pensions freedoms have caused DB members to submit far more requests to access their retirement assets, whether in the form of transfers, applications to take benefits early, and so forth.
This poses three vital communication challenges:
- How do the trustees determine what members need to make the right decisions regarding their pension entitlements?
- How do plan officers interact with members in ways that are practically useful for them and lead to the best outcomes?
- How do you measure the results of the communications strategy?
In this interactive session, Quietroom will share their experiences of member engagement in UK pensions and invite delegates to debate how they are addressing these challenges.
15:55 – 16:25
Coffee
16:25 – 16:45
Presentation: The Government’s Innovation Push: Applying Innovative Technology in the US Property Market
Sandeep Bordia, Managing Director, Head of Research & Analytics, Amherst Capital Management (associated to BNY Mellon)
At the end of 2017 the government announced it wants pension funds to provide long-term investment as part of an innovation push. It also said it will publish a new long-term strategy to ensure that the UK asset management industry continues to thrive and deliver the best possible outcomes for investors and the UK economy. This will include taking steps to improve skills, harness financial technology solutions, bring innovative investment strategies into the mainstream and continue “a coordinated programme of international engagement”. Our speaker will discuss this initiative in relation to opportunities to leverage technological innovation in US property investments.
16:45 – 17:25
Panel: Consequences of CETV Transfers for Funding and the Investment Portfolio
Moderator
Henry Tapper, Founder & Editor, Pension PlayPen
Panellists
David Fairs Executive Director for Regulatory Policy, Analysis and Advice,
The Pensions Regulator
Odi Lahav Chief Executive Officer, MJ Hudson Allenbridge
Fraser Smart Chief Executive Officer, BA Pensions
There has been an enormous volume of transfers from DB funds to DC and other vehicles.
How does TPR see its statutory objective to protect members in light of over £30 billion transferred out of DB schemes last year?
From an investment standpoint there are two principal implications of transfers:
- The use of liquidity management strategies to manage transfers efficiently
- The development of an optimal allocation for the resulting portfolio with its revised liability structure
Pension executives and advisers will discuss how they are working together to manage the effect of CETV transfers
17:25 – 17:30
Closing Remarks
17:30 – 18:00
Drinks Reception and Canapés
18:00 – 19:00
Live Food Stations
Five live cooking food stations will cater an open dinner lasting right the way through the evening. Feel free to stay as long as you please.
19.00
Guest Speaker
Featured Address: Soft Brexit, Hard Brexit or No Brexit – The Consequences
Steve Richards, Political Commentator & BBC Presenter
