Pension scheme trustees should be able to demonstrate effective governance of a scheme's assets to stakeholders, including the beneficiaries and the scheme sponsor.
There is an ongoing focus on governance across the industry and legislation in this area is possible.
P-Solve Asset Solutions’ Total Investment Governance Solution (TIGS), first introduced in 2003, and now utilised by 36 clients with assets totalling circa £1.4 billion,
has been developed specifically to assist trustees of pension schemes in addressing these heightened governance requirements.
The TIGS service is focused on improvement of a pension scheme's financial position – the increase in the value of the assets over and above the increase in the value of the liabilities. As the difference between 1% out-performance and underperformance for a £100 million pension scheme is £2 million, getting strategic and structural decisions right as well as an effective investment governance process in place can have a significant impact on both solvency and hence future contribution requirements.
TIGS offers the potential for trustees to implement a significantly more efficient strategy (measured as the trade off between risk and reward) given the limited time budget available to focus on investment issues. The integrated nature of the service means that, even if changes in investment strategy are required, the implementation of change is simple and cost effective.
We believe that the TIGS service provides an effective solution to the issues currently concerning the trustees of many small and medium size pension schemes. P-Solve has developed this service so that we can provide the same level of delivery, sophistication and quality of advice from our largest to our smallest client. This allows us to align our interests with those of pension schemes and provide trustees with clear measures of success and accountability.
The TIGS service alleviates trustee concerns by addressing governance issues and the investment decision making process. Through TIGS, trustees are able to delegate the implementation and ongoing management of the investment strategy to P-Solve, while at the same time, maintaining responsibility for defining the high level elements of investment strategy, such as the investment benchmark and performance objective.
