Hello, my name is Teresa and I love fitness. At any time of the year you’ll find me circuit training outside, running to and from work, or completing survivor runs.
All of these are great things to do, but it is important to remember the 80:20 ratio. Overall health comes from 80% nutrition and 20% exercise.
Single-handedly, the biggest tool that helped me improve my health was tracking calories – simply monitoring the calories consumed versus calories burnt. That and the awesome mobile app Myfitnesspal (MFP). MFP is a free calorie counter, diet and exercise journal which easily allows you to track your calories and exercise.
– Step 1: Set a goal and timeframe, for example, lose one pound per week.
– Step 3: Enter what you eat day-to-day and try not to go over/under your total calorie allowance.
Each day MFP tracks how many calories I’ve consumed and how many calories I have remaining until I exceed 1500 calories. By far the best outcomes of MFP are having crystal clear goals and taking better decisions due to daily tracking and accountability.
It’s so easy to improve your health when you have clear goals and easy to use technology that allows you to monitor your progress and therefore achieve success.
So what does eating right have to do with pension scheme monitoring?
Like MFP, tracking the progress of your scheme's investment strategy on a regular basis provides the framework and discipline to achieve goals. It also enables stakeholders to benefit from knowing exactly where they are, leaving them feeling in control and with the power to change strategy if they are heading in the wrong direction.
Setting the framework is simple:
– Step 1: Set clear goals and a timeframe, for example, reach full funding by 2030.
– Step 2: Decide all the relevant drivers you are going to monitor. For example, required return, risk appetite, collateral requirements, etc.
– Step 3: Regularly monitor your objectives to ensure you are on track
Once you’ve set clear goals, the value of monitoring is that you can make better decisions by tracking where you are against your objectives, and by understanding the most relevant drivers. For example, by tracking my calories on a regular basis I understand the impact of choosing yoghurt over fruit. Likewise, if a scheme regularly tracks the impact of their investment decisions, they too can choose whether investing in high yield or hedging more liabilities is the right decision for them. By understanding scheme’s risk, stakeholders can assess investment opportunities vis-à-vis the liabilities, and assess the impact of expected returns versus required returns.
Alongside good governance, monitoring enables effective action by providing a clear framework to make decisions, and by highlighting the most relevant scheme metrics. Clear goals plus easy-to-understand monitoring forms a powerful blueprint for any investment committee, CIO or fiduciary manager to follow.
Whether your resolution is to get fit or not, a new year is an opportunity to set yourself goals in all aspects of your life including business. If your scheme doesn’t have regular monitoring, what are you waiting for? The next year is going to happen regardless, so why not think about monitoring as a means to improve your scheme’s health. Give it a shot.