Mellon warns of changing DB investment strategies

New statutory funding objectives will apply from 23 September 2005, as part of the Pensions Act 2004, and Mellon believes their introduction could potentially lead to a change in investment strategies, with newly-empowered trustees opting for more conservative bonds and gilts. Mellon believes many defined benefit schemes are likely to be found to be in deficit under the new statutory funding basis, and combined with the increasing idea of ’nil risk’ for member benefits, trustees may opt for ‘safety above all’, which then has clear implications for investment strategies and future employ...