Half of UK pension funds considering de-risking: Schroders

De-risking is on the agenda of 51% of UK pension funds, research by Schroder’s has shown.

The poll of guests at a UK event for pension funds found that over half of respondents were considering de-risking, through growth assets or risk management.

The mechanisms that clients are most likely to use would be review of growth allocation in general (36%), LDI (28%), reducing overall growth allocation (18%), and longevity hedging (14%). Of the barriers to de-risking, 32% said the size of their scheme would make it unsuitable, 22% cited a lack of understanding from the trustee group and 21% various costs.

Mark Humphreys, Head of UK Strategic Solutions, said: “The recent market turmoil has put de-risking firmly on the Trustees’ agenda for 2012. However our survey highlights what we believe is a wider trend – infrequent monitoring and slow decision making may mean that schemes are not set up to take advantage of opportunities to de-risk when they arise.

“Another interesting finding from our survey is the willingness of many schemes to engage with a wide range of parties when forming investment ideas. Around 36% of the trustees that responded to our survey said they would turn to their fund manager, 67% said to an investment consultant, 48% said to the scheme actuary and 27% said to other advisers including internal resources.”

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