Independents secure future returns
The growth rates of Golden Charter funeral plans are reviewed annually by Golden Charter Limited, having regard to both Trust performance and the plan prices of our competitors. The Board then decides the appropriate levels to set from the coming April. As we outlined in the magazine last April, plan monies are held in two sub-funds, one for Independent Way plans and another for all other Trust based plans.
April’s article noted that the funds had similar investment objectives and explained the reasons why the funds have historically been invested using differing strategies. Investment conditions have remained broadly favourable for the past year. As a result the Trust is stronger than ever with the average value for each plan held increasing. At December 2017, net assets exceeded £1 billion, which represented over 100% of the funding required to settle the liabilities.
Historically the Independent Way sub-fund has been invested in a more conservative, lower risk manner. Recent conditions have allowed the Trust to deliver above-inflation growth on these ‘safer’ investments, but we cannot rely on this unexpected windfall to continue and the Trustees must invest in the best way to deliver the purpose of the Trust: continuing security for those independent funeral directors who will carry out the funerals. To ensure this position, we are aligning the growth rates on both sub-funds.
Our objective is to pay at least long-term forecast CPI, and the reason for aligning Independent Way returns with the main fund at this stage is to seek to ensure that this aspiration can be maintained.
Investment conditions have not deteriorated, but it is important that you, as the ultimate recipients of the funds, understand the underlying reasons why the rates of growth between the plans in the two sub funds are converging. The Trustees work with the Company to protect the long-term interests of plan holders, while delivering sustainable and appropriate plan pay-outs for funeral directors.
Against this background, and with the encouragement of the SAIFCharter Executive, the recommendation for 2018 was that the company moderate the growth on Independent Way plans, with the guiding aim that the Trust remains fully funded into the foreseeable future.
If you would like more information on The Golden Charter Trust, please visit the Trust site
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