Macroeconomic uncertainties and geopolitical upheavals in 2024 could introduce significant volatility to the pensions market. As a result, many Defined Benefits trustees are focusing on derisking their portfolios – with 37% having completed this process and 25% currently doing so, according to new research from Professional Pensions and Pensions Insurance Corporation.
More schemes are also reducing their allocation to illiquid assets, despite the fact the UK government last year advocated for pension funds to invest more in assets such as UK infrastructure. The research showed that 50% of respondents feel they have the necessary scale and expertise to invest in UK infrastructure, suggesting this could be a new area of investment for schemes going forward.
The results also revealed that sustainable investing is once again gaining traction, with 76% of respondents confident in integrating ESG (Environmental, Social, and Governance) factors into their decisions.
As DB schemes navigate these complex investment landscapes, the balance between immediate derisking needs and longer-term opportunities in infrastructure and sustainability remains a key consideration. To read the full report, and learn more about how trustees are navigating the DB pension market in 2024, click below.
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