In a blog post on August 16, 2022, Fred Berry, the Regulator’s leading investment consultant, urged trustees to remain vigilant about changing strategic and operational risks. He noted that the Regulator cannot be everywhere at once and that it relies on trustees, as a first line of the scheme’s defence, to ask such questions as: How is the level of risk justified? What were the advisers’ views? How quickly could investments be de-risked if necessary? He said that so-called “silly” questions can sometimes lead to interesting discussions, and that both strategy and operations are important. 

While the blog does not set out an exhaustive list of risks to consider, it suggests that trustees may also want to bear in mind the implications of rising interest rates for investment strategy, and whether schemes should be reviewing their liability-driven investment (LDI) strategies in the light of recent events.

 


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Lesley Browning
Lesley Browning
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lesley.browning@nortonrosefulbright.com
T: +44 20 7444 2448 / +44 77 1030 3311
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Shane O'Reilly
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