1. Introduction This revised edition of the Statement has been prepared by the Trustees of the Institute of Occupational Medicine Pension Fund in accordance with the requirements of Section 35 of the Pensions Act 1995 (as amended), and Regulation 2 of the Occupational Pension Schemes (Investment) Regulations 2005, and any subsequent additional regulations. In preparing this edition the Trustees have taken appropriate written advice from a suitably qualified individual, Simon Jagger FIA, Director of Jagger & Associates Limited. The Trustees have also consulted with the sponsoring employer. This Statement is consistent with the Fund’s governing documents. It replaces the previous edition dated 23 August 2022. The Fund is registered with HM Revenue and Customs. The Fund provides final-salary related benefits, although accrual has ceased. No formal employer-related investment is intended by the Trustees. The sponsoring employer intends to remit all relevant contributions to the Trustees within the relevant timescales. 2. Delegation of Investment Management The Trustees use pooled funds provided by Baillie Gifford, Legal & General, Pictet, Royal London, Standard Life and Threadneedle. The investments are held via the Mobius Life investment platform. The Trustees have placed no additional constraints on the investment managers. A cash account is also maintained for short-term cash flow. The providers, where relevant, are suitably authorised under the Financial Services and Markets Act 2000. 3. Investment Strategy The broad initial split of the assets is 17% in a Legal & General Liability Driven Investment (LDI) mandate, 33% Standard Life Managed Fund, and 12.5% in each of Baillie Gifford Multi Asset Growth Fund, Pictet Multi Asset Portfolio, Threadneedle Multi Asset Fund and Royal London Extra Yield Fund. The Trustees will keep the allocation of the Fund’s assets between the funds under review. The Standard Life Managed Fund is an actively managed fund whose aim is to outperform the average discretionary pension fund, as measured in the ABI (Pension) Mixed Investment 40-85% Shares peer group. The Baillie Gifford Multi Asset Growth Fund is an actively managed product that does not have a fixed market-based benchmark. Instead, it seeks to generate returns through exposure to a broad range of asset classes. The performance target is to achieve a return at least 3.5% p.a. ahead of the UK Base Rate, with volatility less than 10% p.a. The Pictet Multi Asset Portfolio is an actively managed product that does not have a fixed market-based benchmark. The performance target is cash plus 4% p.a., net of fees, over a 3-5 year period. It aims to target risk as a maximum of 75% of predicted equity volatility. The Threadneedle Multi Asset Fund is an actively managed product that does not have a fixed market-based benchmark. Instead, it targets SONIA + 4% p.a. (gross of fees) over the economic cycle (expected to be 5-7 years). The Royal London Extra Yield Fund is an actively managed bond fund that invests primarily in unrated corporate bonds and out-of-favour investment grade bonds, as well as conventional high yield stocks (defined as corporate bonds of lower than investment grade). The Trustees consider the products used to be appropriate investments for the Fund. In deciding to invest in the funds, the Trustees sought advice from their professional advisers as to the products’ suitability. The Trustees will review their decision from time to time with their advisers. 4. Expected Return on Investments Managed Fund and Absolute Return products are designed to produce a return in excess of both general salary and price inflation over the long term. Such products are therefore expected to enhance the real value of the Fund's assets over the long term, which is a fundamental element of the Trustees’ investment policy. Typically, the asset allocation of Managed Fund products is heavily weighted towards equities in the expectation of higher long-term returns, as is the case for Standard Life’s Managed Fund. Consequently, the product may produce volatile absolute returns over short term periods. It is the Trustees’ expectation that the performance of the Standard Life Managed Fund net of fees will be 1% per annum ahead that of the ABI (Pension) Mixed Investment 40-85% Shares peer group median over the longer term. The Trustees expect that the Baillie Gifford Multi Asset Growth fund will be 3.5% p.a. ahead of the UK Base Rate (net of fees) over rolling five-year periods, with an annual volatility of returns of less than 10%. The Trustees expect that the Pictet Multi Asset Portfolio will achieve cash plus 4% p.a., net of fees, over a 3-5 year period The Trustees expect that the Threadneedle Multi Asset Fund will achieve SONIA + 4% p.a. (gross of fees) over the economic cycle (expected to be 5-7 years). The Royal London Extra Yield Fund aims to achieve a high level of income, and seeks to achieve a gross redemption yield of 1.25 times the gross redemption yield of the FTSE Actuaries British Government 15 Years Index. In addition, RLAM and the Trustees broadly expect the fund to outperform the iBoxx Sterling Non-Gilts All Maturities Index by 1.5% p.a. (net of fees) over rolling three-year periods. The investment performance is monitored quarterly through information provided by the platform provider to the Trustees. 5. Risk The Trustees are satisfied that their investment managers are prudent and professional in their general approach to investment. The investment products used involve holding units in pooled funds that maintain diversified portfolios of shares and securities to reduce the stock- and security-specific risk to the Fund of investing in any specific individual asset. The use of six separate investment managers, and in particular the division of the absolute return element into holdings with three different managers, reduces the manager risk faced by the Fund. The funds are viewed as appropriate investment vehicles for the investment strategy of a paid-up pension scheme. The Trustees will keep the asset allocation under review, and risk measurement forms part of the performance monitoring process. 6. Realisation of Investments The Trustees' policy is to ensure that the assets invested are sufficiently realisable to enable the Trustees to meet their obligations to provide benefits as they fall due. The Trustees are satisfied that the arrangements in place conform to this policy. The Trustees monitor their net cashflow position, the likely need to realise capital, and hence any effect on asset allocation and the choice of investment funds. 7. Additional Voluntary Contributions The Fund has available (with Standard Life) facilities for members to contribute to enhance their retirement benefits. The Trustees believe these to be appropriate facilities for this purpose, but note that the decisions on the funds used rest entirely with the members. There are no contributions being added, given that the Fund is paid-up. 8. Environmental, Social and Governance (ESG) Considerations including Voting and Engagement In endeavouring to invest in the best financial interests of the beneficiaries, the Trustees have elected to invest in pooled funds and cannot therefore directly influence the environmental, social, and governance policies and practices of the companies in which the pooled funds invest. The Trustees exclude non-financial matters in the selection, retention and realisation of investments. The Trustees have no formal policy on either ESG or delegation of voting rights. Instead, they have delegated the responsibility for these matters to their investment managers, who will from time to time report on their current and future actions in these areas. The Trustees will consider a manager’s ESG credentials during their appointment process, and will ask for at least an annual written update on each manager’s activity for the products used by the Trustees. The Trustees will include a statement in the annual report to advise members that this has been done. As the Trustees use pooled funds, their asset managers are not incentivised to align their investment strategy and decisions with the Trustees’ policies, nor are they incentivised to make decisions based on assessments about medium to long-term performance of an issuer of debt or equity, nor to engage with those issuers in order to improve their performance. However, the managers may make such decisions and/or engage of their own accord. Performance monitoring, manager remuneration and duration of manager appointments are covered elsewhere in this Statement, or in the Trustees’ Annual Report. As the Trustees use pooled funds, there is no targeted portfolio turnover or turnover range. As the Trustees use pooled funds, they do not need to have an engagement policy in relation to monitoring the capital structure of companies they invest in, or any associated potential conflicts of interest. The Trustees publish their SIP online for general public access. They also publish annually online an engagement policy implementation statement that outlines how the various requirements (set out above) have been followed during the year, and describes the voting behaviours of the asset managers on their behalf. 9. Compliance The Trustees will formally review this statement as and when required, and at least every three years, with the assistance of their advisers. A copy of this statement is available for inspection by Fund members. This statement has been agreed by the Trustees on 21 December 2022.
Signed on behalf of the Trustees by
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