How to invest for run on | Insight Investment

Key takeways

• Running on your DB pension scheme can retain flexibility and keep your strategic options open, until legislation and regulatory expectations become clearer. Exciting innovation is emerging, as demonstrated by the Stagecoach/Aberdeen transaction.
• DB schemes looking to run on will typically want to ensure they have liquidity to cover their cashflow obligations, hedge their liability risks, and grow any surplus assets.
• A core allocation to contractual assets, such as high-quality corporate bonds, complemented by a hedging overlay, can establish a more resilient foundation on which schemes may then pursue surplus growth while aiming to reduce risk to members' retirement income.