The Cost-of-Living Allowance Fund is undergoing long-term liquidation, which is a key factor in the fund’s strategy. The board of LD Pensions regularly discusses the future strategy of the Cost-of-Living Allowance Fund and takes decisions on initiatives that will ensure the long-term liquidation is carried out in a way that always serves the best interests of the members.
The investment policy of the Cost-of-Living Allowance Fund is based on the expected growth of members’ assets. Each year, the Cost-of-Living Allowance Fund prepares multi-year forecasts for asset growth. The forecasts are presented to the LD Pensions board. The Cost-of-Living Allowance Fund operates on the basis of a main scenario, in which payments to members develop in line with the most recent recorded trends. It is expected that the assets of the Cost-of-Living Allowance Fund will decline by approximately 30 per cent over the next five years.
The investment policy has been designed with due regard to the uncertainty associated with payments to members. These payments, which consist of pension benefits paid as a lump sum or transfers to other institutions, vary from year to year.
The Cost-of-Living Allowance Fund must take into account that more than 60 per cent of the assets belong to members aged over 60 and may therefore, in principle, be payable at relatively short notice. The Cost-of-Living Allowance Fund has no influence over this. This also applies to members who wish to transfer their savings to another pension scheme.
The Cost-of-Living Allowance Fund has already made significant adjustments to ensure that its assets are less risky and easier to convert into liquid funds. The intention is that the Cost-of-Living Allowance Fund will continue to strive to balance returns, risks and liquidity in the future, to ensure that the remaining members receive satisfactory returns on their savings.
Members who have specific investment requirements can choose investment portfolios.
