How the Fund works
Each month our active members and their employers pay into the pension scheme. We invest these contributions in assets such as company shares and property which are managed by professional investment managers.
We invest to achieve our key aims: paying pensions every month, tackling climate change, and making the scheme affordable for local employers.
As a government-backed scheme, members’ pensions provide a guaranteed income which is increased every year with inflation.
Our investments beliefs
1. Long-term
We invest for the long-term, consistent with pensions which will be paid for decades into the future.
2. Diversified
Diversification is core to managing investment risk. We invest across a range of global markets and types of assets to achieve the right balance of risk and return.
3. Responsible
We believe climate change poses an existential threat to the wider world and long-term investments. We work collectively with like-minded investors to make a positive real-world impact.
4. Low cost
Working at scale with other investors through Brunel Pension Partnership (Brunel) allows us to lower our investment costs. This translates into higher overall investment returns.
The role of Brunel
We pool assets through Brunel along with nine other pension funds: Buckinghamshire, Cornwall, Devon, Dorset, Environment Agency, Gloucestershire, Oxfordshire, Somerset and Wiltshire.
Investing through Brunel brings significant benefits:
- benefits of scale – such as lower costs
- strong collaboration around responsible investment
- deeper investment expertise
- new opportunities, for example investing together in climate infrastructure such as wind farms
Brunel provides a range of investment funds which cover different assets classes and levels of risk. We select the right mix of Brunel funds to build our investment portfolio.
Our investment portfolio and asset allocation
We invest across different asset classes such as equities (shares), government bonds, renewable infrastructure such as solar farms, and property.
Such broad diversification helps us to manage investment risk.
| Asset type | Allocation | Description |
|---|---|---|
| Equities | 45% | Equities include shares in companies listed on stock markets around the world. Owning shares means we share the profits of companies in which we invest. |
| Bonds | 20% | Bonds include loans made to companies or governments. Bonds provide income based on an interest rate. |
| Property | 15% | Property includes residential and developments such as warehouses and offices. It generates capital growth and income typically linked to inflation. |
| Infrastructure | 9% | Infrastructure can include assets such as wind farms and electricity transmission. |
| Diversified strategies | 6% | These funds comprise a broad mix of assets designed to yield financial returns which exceed inflation. |
| Cash and other | 5% | Pension funds need access to cash to fund monthly pensions. Cash investments includes money in banks and short-term loans. |
We have also agreed a new 3% allocation to local impact portfolios. This is expected to deliver positive social and environmental impact in the south-west region.
Investment Strategy Statement
This statement sets out the Fund's long-term investments objectives and defines our policy on the suitability and risk attached to different investments. It defines how the Fund invests to honour its future pension commitments.
Find out more by downloading our full Investment Strategy Statement 2024 (PDF, 611.29KB)
Find out more by downloading our summary Investment Strategy Statement 2024 (PDF, 245.59KB)
Investments Holdings Report
We share information about our assets twice a year in an investment holdings report. The report details the names of the funds we invest in, the local currency (ie ‘USD’ for ‘US dollars’), the industry (ie technology) and the value of each holding.
View our Investment Holdings Report March 2024
View our Investment Holdings Report September 2023
Funding pensions
The Fund also has a Funding Strategy. This defines how much employers need to contribute, to ensure there is enough money to fund members’ pensions.
Pensions payable in the future are uncertain and depend on many things including when members retire and how long they live.
Every three years the Fund’s Actuary calculates the fund’s valuation and how much employers should contribute to the Fund, as outlined in these two documents:
Find out more by downloading our Actuarial Valuation Report 2022 (PDF, 2.01MB)
Find out more by downloading our Funding Strategy Statement 2022 (PDF, 733.96KB)