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How we saved our client over £10m in the run up to RPI reform

The background

Announcements over 2019 suggested that the formula for RPI was to be changed from 2030 onwards. As with most pension schemes, our client used RPI-linked assets to hedge a portion of their CPI-linked liabilities. This presented a risk of RPI-linked assets falling in value, with no corresponding fall in CPI-linked liabilities.

Our solution

Using LCP Visualise, our in-house platform for funding and investment analytics, we were able quantify the monetary impact of this risk with a click of a button. We set out our proposals to reshape the client’s hedging assets, to largely remove their exposure to RPI changes, whilst maintaining the same overall protection against rising inflation.

The outcome

Within two weeks, the trustees had reviewed our proposals and restructured their hedging portfolio. Our recommendations and support in the decision-making process allowed the Scheme to take decisive action, and led to a net funding gain of over £10m.

How we can help

We help central banks design and implement investment strategies to get the most out of their reserves in a risk-controlled manner. 

We help charities and endowments construct investment strategies and pick the right investment funds to both meet their financial objectives and be aligned with their missions.

We help our clients to maintain a competitive edge by improving their investment strategies, generating extra returns in a risk-controlled way.

Our intuitive, real-time pensions technology allows you to see the information you need when you need it, helping you to make decisions.

The LCP Wealth Drawdown tool is designed to help advisers explore the impact of charges and other factors on your pension in drawdown.

Our investment team works with trustees of DB and DC schemes to set bespoke investment strategies and select fund managers. Using our market-leading technology, we help you navigate your journey by providing you with clear, actionable insights which enable you to make better short and long-term investment decisions.  

Setting a good investment strategy and picking the right funds is fundamental for wealth managers and advisers to be able to deliver better outcomes for their clients. Our role is to advise clients on investment strategy and fund manager selection bringing institutional discipline to the retail market.

Every sovereign wealth fund has its own unique circumstances and challenges. As an independent consultancy, we’re not linked to any asset manager and we don’t sell investment products.

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