The assets of both funds are based on lump-sum contributions, with payouts made upon leaving the labour market – or later, at the member’s discretion. LD Pensions is responsible for the strategic and tactical management of investments for both funds and outsources all areas where this offers financial and management benefits.
Objective
The Board of Directors of LD Pensions has established a number of objectives and principles which apply regardless of whether investment management is carried out in LD Pensions’ own organisation or under mandates managed by external portfolio managers.
It is crucial that LD Pensions continues to be regarded as a reliable and competent manager of its members’ savings. This is ensured, amongst other things, by investing actively with a focus on long-term value creation, whilst LD Pensions does not pursue ‘quick wins’.
LD Pensions aims to generate returns that exceed the benchmark indices set by the Board of Directors. The aim is to generate competitive returns through active management within the established risk and investment parameters.
Two separate economies within an investment partnership
The Cost-of-Living Allowance Fund and The Holiday Allowance Fund, respectively, have the same management structure, and the investment partnership between the two funds ensures low costs and access to qualified investment advisers in all key areas.
The two funds have the same ‘building blocks’ in which to invest, but each invests in different proportions.
The investment strategy for the Employees' Holiday Allowance Fund differs from that of the Cost-of-Living Allowance Fund. In addition to the different time horizons for the two funds, the Holiday Allowance Fund holds a very specific asset in the form of holiday allowance due from employers. This is a secure asset, as the risk of loss is low, but it is the employers who decide what proportion of the fund’s assets this asset represents.
