The Cost-of-Living Allowance Fund is under long-term liquidation, which is decisive for the fund's strategy. LD Pensions' board continuously discusses the future strategy of the Cost-of-Living Allowance Fund and makes decisions about initiatives, which will ensure that the long-term liquidation happens in a way that always will benefit the interest of the members.
The investment policy of the Cost-of-Living Allowance Fund is based on the expected development of the members' assets. Each year, the Cost-of-Living Allowance Fund prepares multi-annual forecasts for the asset development. The forecasts are presented to LD Pensions' board. The Cost-of-Living Allowance Fund operates with a main scenario, where disbursements to the members develop in line with the latest registered development. It is expected that the assets of the Cost-of-Living Allowance Fund will decline by approx. 30 per cent over the next five years.
The investment policy is designed with due consideration to the uncertainty, which is connected with the disbursements to the members. These disbursements, 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 consideration that more than 60 per cent of the assets belong to the members above 60 and thus in principle may be payable with relatively short notice. The Cost-of-Living Allowance Fund has no influence on this. This also applies to members who wish to transfer their savings to another pension scheme.
The Cost-of-Living Allowance Fund has already undertaken considerable adjustments to ensure that the assets have become less risky and easier to convert into liquid funds. It is intended that the Cost-of-Living Allowance Fund, also in the future, will strive to balance return, risks and liquidity to ensure that the remaining members receive satisfactory returns on their savings.
Members who have specific requirements to the investments are able to choose investment portfolios.