Willis Towers Watson’s annual figures for fiduciary management performance, show that funding levels for the firm’s UK delegated clients improved five times more than the UK defined benefit (DB) pensions industry since starting the comparison in March 2009.Willis Towers Watson’s fiduciary management clients – consisting of UK DB pension schemes ranging from GBP50 million in size to GBP4 billion in assets – have seen their funding levels improve by 24.0 per cent over 11 years to 31 March 2020 compared with 4.8 per cent for the UK DB industry over the same period.
Additionally, Willis Towers Watson’s delegated clients also experienced this change in funding level at less than 40 per cent of the risk of the UK DB industry.
Delegated clients at Willis Towers Watson continued to see exceptional funding level outcomes despite the crisis conditions in the first quarter of 2020, with the average funding level declining by 2.9 per cent in the three months to March 2020 against a wider UK industry decline of 5.6 per cent. Clients that placed no constraints on Willis Towers Watson saw an even smaller fall in funding level of less than 1 per cent over the same period. For the 12-month period to March 2020, the average funding level was flat at -0.1 per cent versus a decline of 5.4 per cent for the wider UK industry.
This strong outperformance was a result of structurally lower equity allocations, highly diverse return-seeking asset exposures and innovative downside risk hedges that were deployed ahead of the crisis.
Pieter Steyn, Head of Delegated Investment Solutions UK, says: “The value of high quality risk management cannot be overstated. We spend our time, energy and resources to give our clients the best opportunity to capture upside, but limit the downside. This is exactly what our clients require in this market environment and this is what our track record so clearly demonstrates.
“Stable progress like this is not only valuable to trustees and the members they represent. Our clients’ sponsors are particularly relieved at this difficult time.”
The annual figures reported today follow a strong 12-month period for Willis Towers Watson’s fiduciary management business in the UK, which saw the addition of 26 new clients in 2019 and a further four already in 2020. The delegated service had assets of GBP57 billion in the UK and GBP112 billion globally at 31 December 2019.
