Pension fund and investment managers should rethink their strategies to ensure better and more resilient outcomes aligned with long-term goals, industry experts at the Pensions and Lifetime Savings Association (PLSA) Investment Conference 2025 have suggested.

During a session on defining risk, WTW managing director, Alasdair Macdonald, highlighted the inadequacy of current simplified investment rules, emphasising the need for a thoughtful approach before making investment decisions.

He said: “Over the last twenty years, lots of simplifications of rules of funds have been developed for how we should be doing investment.

“We really want to make a plea for everyone to take a step back and think and act before they invest because if we do that, we’ll realise that some of those pensions aren’t fit for purpose in the new world.”

He stressed that endgame was not binary and instead is about the period spent in a low-risk spend, which he clarified that when talking about low risk he means a resilient investment strategy, not volatility versus gilts.

“That perhaps starts to challenge whether these low-risk investment strategies are as simple as buying lots of long-dated gilts and investing in growth and whether liability-driven investment is as simple as buying gilts and swaps.”

He suggested returning to “first principles” to build a diversified investment strategy and considering how to match the discount rate approach with that strategy.

He also said that this could reduce risk, and achieve better outcomes for the industry and pension scheme members.

In the session attendees were asked how they would characterise their scheme's mission, half (50 per cent) of respondents said a clear mission just focused on paying member benefits.

In response to this, WTW managing director, David Aleppo, said: “It is pleasing to see there are explicit discussions happening here and almost regardless of what the outcome is, mission clarity is key.

“I don’t believe you can build a strategy or determine success that isn’t aligned with what you’re trying to achieve. We need to change the way we think, act and invest.

"Mission clarity is essential. You can’t build a strategy and you can’t measure success without mission clarity.

"Investment strategy is not either or, it’s not run on versus buyout, it's both, which is going to operate in phases.”

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