point Talking Talking - PRAG

Investments
The money paid into the scheme is invested by
different investment managers across different
‘asset classes’, so for example company shares
(equities), and fixed-interest investments (bonds
and gilts).
The money paid in on behalf of members of the Grattan
and Freemans sections is held in a pool (one for each
section) from which all benefits are paid. Money Purchase
members have their own individual retirement accounts in
the scheme and use their pot of money to buy ‘units’ in
different investment funds.
6
Hands off !
The assets in the scheme are
kept totally separate from the
company’s assets
New strategy to reduce risk
in the pension scheme
The trustees, on the advice of their investment consultants,
have started to switch some of the assets that are held in
equities (company shares) into corporate bonds and gilts.
More details will be provided in next year’s newsletter.
Bonds & gilts
These are loans to companies or governments who
need to raise money to finance projects. (Bonds issued
and backed by the UK government are called gilts.) The
amount of the loan is paid back on a specific date, and
interest payments are made throughout the duration
of the bond, giving a guaranteed stream of income to
the investor. For index-linked bonds, the rate of interest
is linked to inflation – so it increases when inflation is
on the rise and decreases when inflation goes down.