Implementation Statement

Geerings of Ashford Limited 1978 Retirement and Death Benefit Scheme

Implementation Statement

This Implementation Statement (IS) is to be read in conjunction with the Statement of Investment Principles (SIP). The purpose of the IS is to demonstrate how the SIP has been applied in practice by the Trustees and how they have engaged and monitored their investment managers/consultants and advisers during the previous 12-month period.

1. Introduction

In accordance with The Pensions Regulator’s guidance “Set objectives for your investment consultant” the Implementation Statement is in two parts:

Part 1: In this section the trustees have set out, in their opinion, how the SIP has been followed; whether it has been reviewed; what change(s) have been made to it and, if so, the reason for it/them.

Part 2: In this section the trustees have scored their investment managers and consultants against various objectives and services in a ‘balanced scorecard’ which summarises the issues discussed in Part 1, identifies specific areas of concern and allows theme scores to be monitored over time. The themes include:

- Delivering Investment return

- Delivering specialist services

- Proactivity of advice

- Support with scheme management and compliance

- Relationship and standard service

- Support with additional matters arising

PART 1 – Review of the SIP

2. Responsibilities

The SIP sets out the ultimate responsibilities of each party including:

- The trustees

- The investment manager

- The investment consultant

- The scheme Actuary

3. The investment manager

The trustees have considered the investment manager’s 11 key areas of responsibility to the scheme, and how they have performed in carrying them out. In the trustee’s opinion the investment manager has reported to the trustees in great detail on the portfolio performance and market conditions, at each of the trustee’s quarterly meetings during the last 12 months and has carried out the instructions from the trustees in relation to the changes in asset allocation or selection, in a timely manner.

The investment manager has given detailed accounts of the composition of the portfolio and its diversification and the trustees have been satisfied at each meeting that the risk tolerance is within the levels that the trustees agreed at the outset.

The SIP has covered the custody arrangements of the scheme assets via CREST, Cofund and BNP Paribas and AJ Bell, and the trustees are satisfied that these are suitable arrangements as far as they are able to make that assumption.

Again this year the processing of all information has been formally documented in quarterly reports and the investment manager has presented the scheme actuary with a year-end report for FRS102 valuation purposes.

a. Benchmarks and portfolio reporting

The trustees confirm that they have been provided with quarterly valuation reports which have included cash balances, asset allocation, details of all transactions and investment management fees. The valuations have also included benchmark reviews including the MSCI UK index.

b. Investment risk analysis

Investment risk has been a major part of the discussion with our investment manager at trustees’ meetings this year. Market risk being the most notable this year following the Covid-19 pandemic. Our investment managers have guided us through the challenges of decision making on market risk this year and in their capacity as investment consultants have also covered liquidity risk to ensure that we are able to meet the cash demands of the scheme without risking timing issues which may crystalise losses in our growth investments. Inflation and interest rate risk has, to an extent, been taken into account by our investment managers with their choice of investments in the growth portfolio, and the trustees are aware of more complicated risk based securities designed to hedge interest and inflation risk, that larger schemes have used, but we have decided that these mechanisms have been too expensive to implement for our small scheme and beyond our understanding at this stage to pursue them on behalf of our scheme. However we do need to investigate them periodically in case there becomes good reason to begin to implement them for our scheme.

c. Security of assets

The trustees are aware that Brooks MacDonald are fully authorised and regulated by the FCA. As such the funds held by the scheme are fully protected within the FCA rules.

d. How is Scheme money held?

The trustees understand that the money is held usually in pooled client funds with various banks, which have been chosen by BMD in line with the advice given by the treasury committee.

e. Where do Brooks Macdonald hold the Scheme investments?

The trustees are satisfied that the investments held by BMD are separate from their own investments.

f. Investment Management & Consultancy Fees

The charges Brooks Macdonald applied during the last 12 months are in accordance with their fee schedule from the original proposal when they were instructed to act for the scheme, and have been fully documented in the quarterly reports.

g. Corporate governance and Socially Responsible Investment

The trustees discussed the issue of social and environmental investing with their investment managers during the last 12 months and are satisfied that all investments are within lawful bounds and within the trustee’s general moral investment objectives.

h. Monitoring the Investment Manager

The Trustees review the Scheme’s Investment Managers on a quarterly basis. After each of the market updates and reviews of the investment performance the trustees discussed the ongoing performance of the managers and have been satisfied that they have performed well against the criteria shown in the matrix in part 2.

4. The investment consultant

The trustees have been fully briefed during the year of the scheme’s investment strategy. The trustees have a clear understanding of the objectives of the investments and their allocation to meet the liabilities of the scheme, with help from the scheme Actuary and the draft triennial valuation which has been discussed over the last quarter. The statement of investment principles has been updated this year and the trustees have been fully briefed of it by the investment consultant.

a. Investment Strategy

The investment strategy designed with the investment consultant has been in operation for some years now. The intention of the design is a form of de-risking. A proportion of the scheme’s assets are held in government bonds to mature in line with the scheme’s cash requirements over the next 2-5 years; and the remaining assets are held in a growth fund to focus on achieving the required returns to meet future liabilities and ease the pressure on the employing sponsors. The trustees are satisfied that the investment strategy is fit for purpose for our scheme and has been successfully implemented by the investment managers.

b. Investment Policy

The Trustee’s Policy is to seek to achieve the objectives by employing the investment management services of a discretionary wealth manager. Their objective is to select and manage a portfolio of assets across a variety of different asset classes to generate a return which aims to generate growth above the level of liabilities at an acceptable level of risk. As discussed in a. above, this has been successfully carried out in our view.

c. Asset allocation strategy

The trustees have gone through the allocation of our assets each quarter and discussed changes that the investment manager has and wishes to make and are satisfied that the allocation strategy is in line with the other investment objectives of the fund this year.

d. Diversification

Linked with asset allocation, the trustees have also monitored the diversification of the funds and are happy that there is a good level of diversification as part of our risk profile and the investment consultant has ensured that our risk objective in this area have been met.