Investment policy

Forward invests the pension contributions it receives from Unilever, with the utmost caution. Our investment policy serves an important goal: to increase the assets of the pension fund without running major risks. Investing without risk does not exist; investing with (very) little risk is possible but yields too little. Forward invests in such a way that the ratio between return and risk is in balance.

Forward’s investment policy is based on four pillars:

Pillar 1: Diversification across different investment categories

Forward believes that spreading investments across several categories is an important way to reduce risks. The investment policy consists of the two building blocks 'stable return' and 'diversified growth', which are made up of eight underlying investment categories. Thus we want to accomplish that our investments are spread sufficiently without our investment policy becoming too complicated.

Pillar 2: Reducing interest rate sensitivity

Pension liabilities are sensitive to changes in interest rates. For example, if the interest rate goes down, it means an increase in our pension liabilities. We would then need more cash money (capital) to pay all future pensions, which would be detrimental to our financial position. Therefore, we try to minimise the interest rate sensitivity. We do this by entering into so-called interest rate derivatives. Also, some of our investments (e.g. government bonds) minimise the interest rate sensitivity.

Pillar 3: Reducing currency risks

The investment of assets in foreign currencies poses exchange rate risks. By hedging these risks, Forward’s invested capital is less sensitive to currency fluctuations against the euro.

Pillar 4: Investing responsibly

Although there is no official policy for Forward in this area yet, a certain level of responsible investing has been realised right from the start by the choice of a number of investments made by our asset management company Univest. This means that Forward’s investment portfolio is screened for the so-called ESG (Environmental, Social and Governance) criteria. The letters ESG stand for environmental, social (policy) and good corporate governance.