Group Risk Plan: Investment

This is only relevant when insuring either a survivor’s pension, children’s pension or disability pension and where it is agreed that Nordben will increase the pension whilst in payment.

The level of increases can be chosen from the following range:

• 0% to 3%; or
• our discretionary bonus increase, which targets consumer price inflation but does not guarantee it (the increase could be higher or lower)

The pensions with discretionary bonuses are provided from the Pensions in Payment policyholder fund. The fund currently invests in long-term fixed interest bonds, equity funds and cash. Nordben aims to invest an appropriate percentage of its assets in fixed interest bonds so that it can broadly secure the guarantees underlying the Plan.

Having prioritised covering the guarantees, the remaining funds are then invested to secure the best return for policyholders within an acceptable level of risk. Nordben currently invests the funds in a mixture of equity funds and cash.

The discretionary bonus increase is declared by the Board of Directors having regard to the advice of the Actuary. The increase can be 0%. The increase for Pensions in Payment is not expected, necessarily, to remain at constant levels from year to year, as increases in annuities are determined having regard to price inflation for the period September to September in the currency of the annuity. This is a target and not a guarantee as the increase could be higher or lower. The target may change over time.