Preserving purchasing power under the WTP
Under the Future Pensions Act (WTP), investment risk sits entirely with the member. Higher rates now directly reduce the benefit. WorldView offers pension funds two solutions: the Real Return Mandate and a portfolio with an integrated inflation objective. Both protect what pension funds must actually deliver: real purchasing power.
The WTP changes everything
Under the WTP — collective contribution scheme — each cohort has its own pension pot. Investment risk sits directly with the member. That makes translating investment policy into real pension outcomes critical.
The employer has stepped back from investment risk. Risk sits entirely with the member. At the same time, inflation over 2022–2025 was 22% cumulatively — yet the portfolio is still often benchmarked nominally.
Real target pension pot as the starting point
The starting point is not a nominal benchmark or peer comparison. The starting point is the real pension, inflation-adjusted. The portfolio is built to protect the purchasing power of benefits.
- CPI+ target instead of nominal benchmark
- Actuarial techniques for cohort and benefit modelling under the WTP
- Mean-CVaR optimisation for downside risk
- Scenario analysis under diverse inflation scenarios
- Institutional reporting and governance support
Optimisation against loss of purchasing power
Temporary market moves can recover. Loss of purchasing power through inflation is often permanent. A pension fund cares little about upside above target. It loses through negative real outcomes.
CPI as benchmark
The portfolio is optimised relative to inflation, not a nominal benchmark. The objective is protection of purchasing power.
Mean-CVaR optimisation
Conditional Value at Risk measures maximum expected loss. A coherent risk measure (Rockafellar & Uryasev, 2000) for what trustees fear most.
Weighted Risk Metric
Selects simultaneously against the probability of negative real return and missing the target. The minimum-WRM portfolio is our SAA.
Three regimes, one discipline
The mandate is designed for higher inflation, survives low inflation and protects capital in deflation. CVaR budget binds in defensive rebalancing.
Full mandate or inflation objective within the existing portfolio
Pension funds differ in governance, scale and existing manager structure. WorldView therefore offers two routes to the same goal: protection of real purchasing power.
Real Return Mandate
A fully integrated mandate in which WorldView brings SAA, TAA, risk management and reporting together in one auditable portfolio.
- Segregated managed account under your own custody.
- Implementation via index products and direct equities.
- No fund-of-funds, no hidden managers and no performance fees.
- Weekly reporting cadence and clear governance support.
Portfolio with integrated inflation objective
For pension funds that wish to keep their existing portfolio and governance but integrate an explicit inflation objective.
- Explicit inflation component within the total portfolio.
- Investment committee retains full control.
- Fits alongside existing managers, mandates and reporting lines.
- Suitable when a full restructuring is not desired or not required.
Three phases to an operational mandate
Diagnosis
A deeper review of your current portfolio against CPI+ scenarios. Output: quantitative overview of purchasing-power outcomes under diverse inflation scenarios via our Mean-CVaR model.
Design
Proposal for a Real Return mandate with specific weights, risk budget and governance. Including a due diligence session with the Investment Advisory Committee.
Mandate
Segregated managed account. ISDA, custodian, investment policy, weekly reporting cadence. Live within 12 weeks of principle decision.
Let's talk
We are available for a follow-up discussion with the Investment Advisory Committee and other stakeholders.