Professional Pensions' latest webinar - held in conjuction with Aon, BlackRock and Schroders - looks at the specific cashflow challenges schemes have been facing during the disruption and market volatility caused by Covid-19; explore how different schemes are managing cashflows; and ask if there is a need for pension funds to reconsider what they are currently doing in this area.
Nearly three-quarters of UK defined benefit (DB) pension schemes are now cashflow negative - an outgoings gap that is likely to increase as schemes continue to mature, members transfer out and use the flexibilities allowed under Freedom and Choice.
However, while being cashflow negative is becoming a normal scenario for DB schemes, it does present specific challenges as assets need to be properly managed in order to meet cashflow and collateral needs - planning that is especially important during extremely volatile market periods such as those experienced over the past month.
Disinvesting assets remains the most common way for schemes to meet cashflow requirements but an increasing number of pension funds are looking to alternative ways of meeting their cashflow needs. Having a strategy is clearly important.
This webinar looks at the specific cashflow challenges schemes have been facing during the disruption and market volatility caused by Covid-19; explore how different schemes are managing cashflows; and ask if there is a need for pension funds to reconsider what they are currently doing in this area.
It also looks at why schemes may need to adapt their current strategy to meet short-term scheme payments and assess how cashflow-driven strategies can be integrated with a scheme's overall liability-driven approach.
Joining PP to discuss the issues involved were Sion Cole, managing director of UK OCIO at BlackRock; Louis Hill, principal investment consultant at Aon; and Patrick O'Sullivan, solutions manager at Schroders.
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