Solvency Management

Solvency Management

Solvency Management is a service that enables pension schemes to outsource the management of the pension scheme’s solvency position to Investment Solutions. The day-to-day management of a scheme’s assets is delegated to us, in trying to achieve the liability-related objectives within the set risk constraints and parameters.

The Key Benefits of Solvency Management

• The focus is on improving the overall solvency level of the scheme, not just the assets of a pension scheme in isolation. By providing a holistic solution we are able to look at the entire scheme rather than trying to fix individual components.
• Vastly accelerated decision-making, enabling the scheme to take advantage of market movements to more appropriately position the scheme relative to its liabilities (e.g. move into growth or protection assets).
• Meeting the key objectives of the scheme, by leveraging investment technology and outsourced decision-making.

A high degree of transparency is provided (scheme funding level reporting) so that decisions can be easily scrutinised and overall control is retained by the trustee board.

Achieving Pre-agreed Scheme Targets
To achieve pre-agreed scheme targets, Investment Solutions will work with the scheme and its advisers to formulate long-term strategic asset allocation between growth (such as equities) and protection (such as bonds) assets, coupled with adding value through shorter term Tactical Asset Allocation (TAA) within growth and protection assets, in order to lock-in pension scheme returns and reduce volatility over the longer term.

We offer a range of approaches depending on the level of governance required. On a simple level we offer mechanistic trigger de-risking, through to full dynamic solvency based trigger de-risking, requiring higher levels of ongoing governance.