It is the responsibility of the LD Pensions Board of Directors to establish a risk profile for LD Pensions’ investments and, on that basis, to set investment limits for the individual investment areas. The risk profile and investment limits must be established in such a way as to best safeguard the interests of the members.
Scenario-based strategy
Scenarios for long-term asset performance and payouts to members form the basis of the investment strategy. Based on data on investment assets and financial markets, LD Pensions analyses various ways of optimising the investment portfolio so that it best meets the requirements for long-term returns, short- and long-term risk, and liquidity. Based on scenario-based analyses, LD Pensions sets the framework for the investment portfolios, including benchmark indices and risk targets.
Members of the Cost-of-Living Allowance Fund have shown very stable withdrawal behaviour over several years. On average, members delay the date of withdrawal by 4–5 years compared with the general withdrawal age of 60. Many leave the money in the scheme beyond state pension age.
It is difficult to predict how the assets of the Employees' Holiday Allowance Fund will develop. This is partly because we have only a few years’ experience of members’ withdrawal behaviour, as well as uncertainty regarding employers’ preferences as to whether to pay the Holiday Allowance funds into LD Pensions or to retain the funds within their companies. LD Pensions is therefore working with various scenarios as a framework for its investment strategy.
You can also read more about the key elements of LD Pensions’ equity strategy here:
