1. Hilary Salt Member Trustee Network Conference 2013

2. To pay the right amount of money, to the right people, at the right time

3. Generate a stream of income to pay pensions as they fall due ….. …. and retain value sufficiently so that when a scheme is in run off, assets can be sold to pay the last cohort of pensioners

4. UK Equity Returns

5. Proposed Methodology Focus on future income streams correct Generating real income streams should be a key investment strategy −This does not mean a bond strategy −Benefit outgo should drive investment strategy (not the other way around) Pensions are long term vehicles and valuations should be a periodic assessment of whether we are going roughly in the right direction

6. Barriers to the Proposed Methodology Can we play the ball from where it is? Valuations used for all the wrong things −Accounting valuations −Funding valuations −Buy-out valuation – but PPF to cover insolvency

7. Schemes in Wind Down Schemes closed to future accrual using ‘flight plans’ As funding position improves, move assets into bonds to ‘reduce risk’ What is the meaning of risk for a pension scheme? −Risk of falling funding position measured against a bond based valuation measure −Risk of not meeting the benefits (or the benefit expectation) Problems with DC ‘reckless’ caution, funding for buy-out

8. Things to Watch For The attitude of the Pensions Regulator A lucky pair? Defined ambition