Our approach to investing

While this is quite unusual for a UK pension scheme, managing assets in-house, involving external partners where appropriate, ensures that Railpen has efficient and effective oversight of its investments. It also ensures that Railpen can consistently apply a set of Investment Beliefs (see below) in the interests of the Fund and its members.

Ultimately this results in better outcomes for members as, while part of the Fund's assets come from the money (or ‘contributions’) that members and their employers pay in, a large proportion is from returns on investments. You can read more about where we invest, and why, on the where we invest page.

Investments work differently for defined benefit (DB) pensions and defined contribution (DC) pensions. DC pensions include the BRASS and AVC Extra Additional Voluntary Contributions arrangements. You can find out more about these investments on the how investments work page for BRASS and AVC Extra members.

Railpen is here to secure members' future. Everything it does focuses on achieving this – from investment returns to its impact on the wider environment and communities.

Investment Beliefs

All of Railpen's investment decisions are outcome-oriented – they focus on the needs of the Fund and its members, and they adhere to a set of ‘beliefs’.

These beliefs help the Investments team stay focused on the mission to pay members pensions securely, affordably and sustainably.

The 6 Investment Beliefs are that:

1. Managing asset-liability risk is integral to a scheme's long-term success. 
2. Long-term focused investment decision-making has many advantages that should be carefully exploited.
3. Diversification of the overall investment portfolio, across different structural drivers of return, improves the resilience of a scheme's assets in an uncertain world. 
4. Incorporating and acting upon climate risk and other environmental, social, and governance factors is a significant driver of investment outcome and part of our fiduciary duty. 
5. Effective portfolio management requires flexibility around a thoughtfully considered investment strategy. 
6. Investments should be selected, structured and sized in a manner aligned to a scheme’s long-term objective.

These beliefs help Railpen to maintain discipline through turbulent times but empower the team to react to risk and performance insights from its portfolios and the wider markets. The primary goal is to remain focused on delivering strong returns for members over the long term – ensuring it secures its members' futures.

To find out more about the principles governing how decisions about investments are made, give the Statement of Investment Principles (SIP) a read.