Inflation fears and rising interest rates have made it a tough year for investors, but there have been positives for defined benefit pension schemes
Three key figures at Quantum Advisory have addressed pension trustees, policy makers, finance directors and HR managers based in South Wales and the South West at the Company’s first in-person pension and investment seminar in over two years.
Since Quantum’s last “live” Pensions for Breakfast event in November 2019, markets have seen many fluctuations including Brent Crude Oil dropping to a low of $17 and peaking at $128 a barrel, year on year inflation falling to a low of 0.5% but now standing at 11.7% and the 20 gilt yield hitting historic lows of 0.5% before rising back to around 2.5%.
This free event took place on Thursday 14 July at the Celtic Manor Twenty Ten Clubhouse, Newport, and featured speakers Dan Redwood, Robin Dargie and Simon Hubbard.
Senior Investment Consultant and Actuary Dan Redwood has over a decade of experience in the industry and spoke of the difficulties investors have faced this year. Dan said:
“2022 has been a challenging one for investors with China’s zero COVID policy and Russia’s invasion of Ukraine exacerbating already high inflation through supply shocks. Inflation is at its highest level for 40 years and central banks are now having to balance tackling this with the risk of recession. Looking ahead, markets are pricing in inflation to peak later this year, then pass, which will be welcome news. There are, however, plenty of risks out there that could stop this from being borne out. A rare positive is that rising interest rates mean that we’re seeing many pension schemes’ funding positions becoming stronger. For those in this situation, it’s crucial they move now to ‘lock in’ any gains while they can.”
Simon Hubbard, Senior Consultant and Actuary at Quantum gave a risk transfer update, providing insights into the varying end game options for defined benefit pension schemes, which are now in touching distance for many schemes following the continued increase in gilt yields since the start of the year, while Quantum’s Senior Consultant, Robin Dargie concluded the event by giving guests an overview of the pension sector including the status of the long-awaited Pensions Dashboards, new regulations on pensions scams which the Department for Work and Pensions will review in 12 months, and the rules for simplified defined contribution pension statements.
About Quantum Advisory
Quantum Advisory has offices in Amersham, Birmingham, Cardiff, and London and provides pension and employee benefits services to employers, scheme trustees and members. To keep up-to-date with its latest events or for more information about Quantum Advisory, please visit: https://quantumadvisory.co.uk/events.