UK - John Ralfe, head of corporate finance at the UK pharmaceuticals chain Boots, has defended his pension scheme's controversial move out of equities, claiming that there's nothing magic about holding equities.
Explaining the rationale behind the move to the National Association of Pension Funds (NAPF) conference in London, Ralfe said that retirement security mattered to scheme members, not outperformance associated with equities. Improved performance doesn’t matter to our members, security does, he said.
Investing the entire pension fund in long dated ‘AAA’ rated bonds would provide security as they move in line with the fund's liabilities.
Ralfe highlighted other benefits that the move had brought both the company and the fund, most notably the costs savings from dropping equities managers and the time saved by staff on both fund management and compliance issues.
By Geoffrey Ho
Partner Insight: Members' evolving needs and expectations are driving changes in scheme administration. As the pensions landscape inevitably continues to change, how will your scheme's approach need to develop to keep pace?
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