Consultant William M. Mercer is cautioning pension funds not to make hasty investment decisions in response to current market volatility.

Andy Green, head of investment strategy at Mercer, comments: "We would caution trustees against taking rash decisions at this time. What is needed is a measured reassessment of investment strategy against current market and economic conditions.

Green adds: "Pension fund investment strategy is set with a long-term framework in mind, and implementation of any strategic change will require careful
planning in the medium-term.
"Until orderly markets return, substantial transactions should be avoided
unless absolutely necessary."

He goes on to note that any action needed will depend on the particular circumstances facing individual pension funds.
“Considerations should include whether trustees have already adopted a defensive strategic position. Another factor is pain tolerance - that is, the ability of a pension fund to 'ride it out' and make good any shortfalls should the situation fail to improve."

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