How prepared are schemes for negative cash-flows?

23 June 2017

Last week Mercer published its 'European Asset Allocation Survey 2017' which found that more than 50% of UK Defined Benefit plans are now cash flow negative and just 37% had formal de-risking triggers in place. It is a trend we have seen over the last few years and one that our Directors were discussing recently at a training event including inputs from Aviva and Fidelity.

These internal events, which we regularly run and attend, allow us to take back to our clients insight on how to prevent or overcome common challenges. On this occasion we explored how maturing pension schemes need to focus on cash-flow management to ensure payments can be made when required without unplanned disruption of investments.  We have also observed increased unpredictability in some schemes as members choose to transfer out of defined benefit arrangements. With more than half of schemes now cash-flow negative, schemes must avoid complacency and develop appropriate strategies. At LawDeb we are working with providers and advisers to better understand how more cash-focussed strategies can be used to ensure the best outcome for our client’s schemes.

To find out more about our work or to discuss how a LawDeb independent trustee can work with you, contact one of our team.

You can read the full Mercer report here.

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