EC Meeting Papers July 2018

General Federation of Trade Unions Pension Scheme

Trustees’ Annual Report

Year Ended 31 December 2017

Method

Significant actuarial assumptions

Discount interest rate

GFTU 5.35% PCS 3.1%

Future Retail Price inflation

GFTU 3.1%

PCS 3.1%

Future Consumer Price inflation

RPI 2.5%

CPI 2.5%

Pension increases

In line with RPI/CPI subject to caps

Pay increases

4.0%

Mortality

S1NxA with no adjustment CMI 2012 (1.5%)

INVESTMENT MANAGEMENT

Investment managers

The scheme’s investments are managed by Legal & General Investment Management.

Investment principles

The trustees have produced a statement of investment principles as required by section 35 of the Pensions Act 1995 and this is available on request from the secretary to the trustees whose address appears on page 1 of this report.

Review of investment performance

Details of the scheme’s investments are given in note 7 to the financial statements. An analysis of the asset allocation of the scheme’s investments is provided below:

2017

2016

%

%

26.22 37.10 36.68

26.22 37.10 36.68

Over 5 year Index Linked Gilts Index Fund Investment Grade CP Bonds All Stocks

Global Equity 70:30 Index

100.00

100.00

The trustees consider that the spread of investments both geographically and by investment category enables the scheme to benefit from potentially higher rates of investment growth in different markets whilst also decreasing the effect price fluctuations within a particular market may have on the scheme. The proportion of the scheme’s assets invested in a particular market is determined by reference to the relative rate of return and risk associated with that market.

The trustees consider that all the scheme’s investments are readily marketable.

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