T I ON L TSU A T I OR AL T R RA L T R - Dignity Funerals€¦ · t is widely known that funeral...
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N A T I O N A L F U N E R A L T R U S T ANNUAL REPORT 2016
Transcript of T I ON L TSU A T I OR AL T R RA L T R - Dignity Funerals€¦ · t is widely known that funeral...
NATIONAL
FUN E R A L T R
UST
MANAGING TRUSTEESPT Hindley (Chairman)JW Hough B Doherty
CUSTODIAN TRUSTEERoyal Exchange Trust Company Limited4th Floor40 Dukes PlaceLondonEC3A 7NH
INDEPENDENT AUDITORErnst & Young LLPNo.1 Colmore SquareBirmingham B4 6HQ
ACTUARYPricewaterhouseCoopers LLPCornwall Court19 Cornwall StreetBirmingham B3 2DT
INVESTMENT MANAGERS(as at 30 December 2016)M&G Investment Management LimitedGovernor’s HouseLaurence Pountney HillLondonEC4R 0HH
Blackrock Investment Management UKLimited12 Throgmorton AvenueLondonEC2N 2DL
Nephila Capital Ltd (Iron Catastrophe Fund Ltd)Victoria Place3rd Floor West No. 31 Victoria StreetHamilton HM 10Bermuda
Alcentra NY LLC200 Park AvenueNew YorkNY10166
Lazard Asset Management50 Stratton StreetLondonW1J 8LL
Schroders31 Gresham StreetLondonEC2V 7QA
M&G (Guernsey) LimitedGround Floor, Dorey CourtAdmiral ParkSt Peters PortGuernseyGY1 1HT
ADMINISTRATION MANAGERSDignity Pre Arrangement Limited4 King Edwards CourtKing Edwards SquareSutton ColdfieldB73 6AP
NATIONAL
FUN E R A L T R
UST
A N N U A L R E P O R T 2 0 1 6A N N U A L R E P O R T 2 0 1 6
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 1
2 11
CHAIRMAN’S STATEMENT
“I am pleased to present theannual statement of NationalFuneral Trust for the 53 weeksended 30th December 2016.”
Peter Hindley
Iam pleased to present this annual statement
for the Trust, which provides security for
plan-holders’ payments for Chosen
Heritage, Personal Choice, Royal London,
Skipton Building Society, Post Office Financial
Services and Dignity Funeral Plans.
The Managing Trustees (referred to in this
report as either the ‘Managing Trustees’ or the
‘Trustees’) have always been committed to
providing clear information about the money held
on behalf of plan-holders, together with other
information about the Trust. I thank my fellow
Trustees for their continued support.
Annual Reports for the National Funeral Trust
have been published since the early 1990s, as we
believe it is important that we are open and give
clear information about the Trust. Competition
experienced by the Dignity plc Group
(‘Dignity’) who market and sell the plans has
been greater in the last year. Nevertheless, the
number of plans outstanding at the period-end
was 138,593 compared with 128,464 at the same
time last year following gross sales of 21,431
(2015: 20,973) in the period, a result of a strong
performance.
The Managing Trustees have continued to
receive advice on a prudent investment strategy
for the Trust. Early in 2017, they concluded that
it would be appropriate to move investment
advisers from Willis Towers Watson to Mercers.
Mercers now provide investment advice to the
Trustees and have been mandated to actively
manage the investments on the Managing
Trustee’s behalf based on a defined statement of
investment principles. This approach will
continue to result in a broad mix of investments
being held, including some exposure to overseas
markets and to equities. This change is expected
to enhance investment returns, in the longer
term for a similar level of risk. The strategy will
however potentially result in greater volatility
year on year in the reported value of the Trust’s
assets.
The Trust held assets equating to an average
of approximately £2,940 (2015: £2,560) per
member at the end of the year. This compared
favourably to the amount paid to Dignity for
performing funerals as required, which averaged
£2,615 (2015: £2,570).
A range to meet every requirement.For further details on our range of funeral plans call free on
0800 38 77 17
THE DIGNITY PORTFOLIO
FUNERAL PLAN
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 2
However, the actuarial valuation (which is
prepared annually and is not audited), which
uses very cautious assumptions and assumed the
investments fail to produce a return in excess of
inflation, showed that after paying for the
funeral of each plan-holder there remains a
small deficit. This valuation does not take into
account any benefit from the actuarial surplus
generated by new plan sales or all of the
anticipated returns from the Trust’s investment
strategy. Whilst the Managing Trustees cannot
guarantee the level of investment returns in the
future or whether the deficit will be eliminated
in future years, they believe, based on the advice
received, that the prudent investment strategy
should deliver the returns targeted, thereby
eliminating the deficit and providing more than
sufficient funds to the Dignity plc Group, who
ultimately guarantee to perform the services in
Plans sold. The Managing Trustees therefore
remain confident that the Trust is well placed to
fund funeral payments as required.
The Funeral Planning Authority (FPA) was
established in 2001 and monitors annually, the
activities of all its members. Dignity Pre
Arrangement Limited is a founder member of
the FPA.
The Trustees confirm that as far as each
Trustee is aware there is no relevant audit
information of which the Trust’s auditor is
unaware. The Trustees further confirm each of
them have taken all steps that they ought to
have done as Trustees to make themselves aware
of any relevant audit information and to
establish that the Trust’s auditors are aware of
that information.
HM Treasury requirement The National Funeral Trust
Trust established by written instrument
More than half the trustees must be unconnected with Dignity Pre Arrangement Limited
The trust must have an independent fund manager
Annual accounts must be audited by a registered auditor
The assets and liabilities of the trust must be actuarially valued at least once every 3 years
Yes
Yes
Yes
Yes
Yes - The National Funeral Trust has annual actuarial valuations
Financial Conduct Authority requirements for Funeral Plan providers
10 3
Peter Hindley is the chairman
of the Trustees, and was
appointed Non-Executive
Chairman of Dignity plc in
January 2009.
John Hough was appointed as
an Independent Trustee of the
National Funeral Trust in
October 2000. John was
Chairman and Managing
Director of Aspen plc, a
city-based firm of actuaries and
pension consultants, for 19
years. He was a founding
shareholder of this firm having
previously followed an actuarial
career and then worked as an
investment consultant. As an
independent trustee of various
pension schemes, institutional
funds, charity distribution funds,
and Non-Executive Chairman
of two companies, John has wide
experience of such roles.
Brian Doherty has been a
professional within the pensions
industry for more than 30 years,
having worked for Prudential
and Sedgwick. Brian established
his own pensions consultancy,
which was acquired by what is
now Gallaghers. He now
operates as an independent
trustee through his company,
Caledonian Trustees Ltd.
Dignity Pre Arrangement Limited is
aresponsible for the day to day
marketing and administration of the
various plans. The Managing Trustees have
overall responsibility for the management of the
National Funeral Trust. Their specific duties
include setting the investments policy in
consultation with the Actuary and ensuring
that this policy is communicated to, and
followed by, the Investment Managers.
They meet on a regular basis and keep a
close watching brief on the performance
and administration of the Trust.
MANAGING TRUSTEES
Peter Hindley John Hough Brian Doherty
Peter Hindley
Chairman of the Trustees
National Funeral Trust
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 3
HOW THE PLAN WORKS
4 9
Geographic coverage of funeral directors serving NFT members
National Funeral Trust funeral directors
THE CUSTODIAN TRUSTEE
THE ACTUARY
Royal Exchange Trust Company Limited is
the legal Custodian Trustee.
Following the transfer of Royal Exchange
Trust Company Limited to Capita plc (a FTSE100
Company), some activities are carried out by
Capita Trust Company Limited under a Power of
Attorney. Capita Trust Company Limited is a
subsidiary of Capita plc and its business is the
provision of a wide range of corporate and trust
services. Royal Exchange Trust Company Limited
is a fully owned subsidiary of Capita Trust
Company Limited. All payments from the Trust’s
bank accounts are controlled by, and all
investments are registered in designated accounts
held under the control of, Royal Exchange Trust
Company Limited. The Custodian Trustee
maintains regular contact with the Investment
Manager and the Managing Trustees.
It is widely known that funeral costs have risen
rapidly over the years. This means the precise
pricing of Plans, payments to funeral directors
and the careful investment of funds are critical.
In addition there are substantial costs for running
the scheme, both at the time of sale and
throughout the life of the Plan that have to be
taken into account. These include marketing and
administration, the costs of the customer contact
centre, legal and regulatory fees and other
management expenses (“the Scheme Charges”).
Each year an assessment of likely future costs, life
expectancy and investment returns is undertaken,
along with a review of the current market price of
funerals, when setting Plan prices.
An allowance for the Scheme Charges is paid from
the Trust Fund at the time of a plan sale. The
remaining sum is held in the Trust and is available
to pay the funeral director for providing the
services promised in the Plan. This means that the
amount paid to the funeral director must be less
than the normal market price for a funeral.
Dignity, which owns the majority of the funeral
directors supporting the Plan, has committed to
accept this reduced amount and provides a
guarantee to all plan-holders in respect of the
services described in their Plans.
As a consequence the trustees and investment
managers can make sensible and prudent
investment decisions.
The prudential and balanced approach to plan
pricing, the level of remuneration for funeral
directors and the criteria adopted for investment
of the funds (see under ‘The Investment
Managers’) seeks to ensure that Dignity can meet
its obligations to plan-holders.
Mr Jeremy May of PricewaterhouseCoopers
LLP has been the appointed actuary to
the Trust from the beginning of 2007. His
task is to make a skilled and informed assessment of
the future liabilities of the Trust, and the investment
strategy required to meet all future commitments. A
team of actuaries at PricewaterhouseCoopers LLP, a
leading consultancy firm, supports him.
The actuary is completely independent from Dignity
Pre Arrangement Limited and prepares a full actuarial
valuation every twelve months. The actuary compares
the assets of the Trust with the expected cost of
existing members’ funeral plans to ensure that it is not
dependent upon new members joining to maintain its
financial strength.
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 4
WHY A TRUST FUND ?
ABOUT THE TRUST
National Funeral Trust (“the Trust”) is afund whose assets are entirely separateand independent of Dignity Pre
Arrangement Limited (“the Company”) and itsother subsidiaries (together the “Dignity Group”).The Trust Fund is fundamental to the security ofboth members and funeral directors. Dignity plc(“Dignity”), the ultimate parent of the Companyprovides a guarantee to carry out the funeral service
for each plan-holder, and payment is only made tothe funeral director once the funeral has taken place.In this way we are able to ensure plan-holdersreceive the funeral that they have chosen. TheTrust was established in 1986 and the Statement ofNet Assets show the amount held in respect offuture funeral obligations. The trust has been able tomeet its liabilities every year since 1986 andcontinues to be able to meet its liabilities.
It is a requirement of the Financial Conduct
Authority that funeral plan providers place
customer monies into either an
independently managed Trust Fund or into
whole of life insurance policies. Dignity chose
to operate independent Trust Funds for a
number of key reasons.
A funeral plan Trust Fund is specifically
designed to protect customer's money until it is
needed to pay for the funeral and to invest the
funds in a way that will provide the required
return. The actuary to the Trust is specifically
assessing the Trust's ability to meet future
funeral payments and liabilities. This is very
different to a whole of life policy, which is
usually only designed to pay out a set sum
assured and where the insurance companies
actuaries are not considering future funeral
costs, only the policy’s ability to pay out the
sum assured.
Furthermore, because the Trust Funds sole
purpose is to pay for funeral expenses, all the
money invested in it goes towards this aim (but
see below). There are fees taken to manage the
Trust and scheme expenses, but there are no
insurance company profits to be deducted from
the return on the assets meaning more goes
towards future funeral payouts. The Trustees
may also make additional payments to Dignity
Pre Arrangement Limited if the actuarial review
shows there is a surplus of funds and they
consider it prudent so to do.
TRUST FUND SECURITY
NATIONAL
FUN E R A L T R
UST
THE INVESTMENT STRATEGY
During the period, the Trustees, with advice from Willis Towers Watson, revised the investment
astrategy of the Trust and now have the objective of holding assets in the following proportions:
This change in investment strategy is expected to enhance investment returns in the longer-
term for a similar level of risk as that taken previously. The strategy will, however, potentially
result in greater volatility year on year in the reported value of the Trust’s assets.
zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz
The strategy will also mean that the assets are held by a number of different investment managers, who
are considered to be the most appropriate manager for the particular asset class.
aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
Since the period end, these investment objectives and allocations are under review and will change in
2017.
8 5
One hundred per cent of all funeral plan
payments received are paid directly
into the Trust. All of the Trust’s bank
accounts are under the complete control of the
Custodian Trustee, Royal Exchange Trust
Company Limited. Members make cheques
payable to National Funeral Trust. No director
or employee of Dignity is a signatory to the Trust
bank accounts. Payments from National Funeral
Trust to Dignity Pre Arrangement Limited can
only be made by Royal Exchange Trust
Company Limited after agreed payment
procedures between them and the Managing
Trustees have been followed. These payments
include Scheme Charges and charges of the
funeral directors in providing their service.
An independent audit of the Trust financial
statements is carried out annually by Ernst &
Young LLP. In addition an independent actuary
reviews the value of the fund annually.
Target (%)
22Equities
Alternative investments 13
Investment grade bonds 45
Developed credit and cash 20
Total 100
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 5
6 7
Extracted from the audited accounts.
As at 30th December 2016
Assets Members
Trust Fund Net Assets and numbers of current members
NATIONAL
FUN E R A L T R
UST
NATIONAL
FUN E R A L T R
UST
STATEMENT OF NET ASSETS HOW THE FUND IS INVESTED
Fixed asset investments
Current assets
Short term deposits and cash
Current liabilities
Accruals and other creditors
Prepayments
Instalments due from members (1)
Net current assets
Amount held in respectof future funeral obligations
333,128
£’000
2016
54,374
(7,658)
39
27,732
82,145
74,487
407,615
296,070
£’000
2015
17,275
(5,655)
77
20,875
38,227
35,572
328,642
1. This includes amounts both falling due within one year and falling due after more than one year.
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 6
6 7
Extracted from the audited accounts.
As at 30th December 2016
Assets Members
Trust Fund Net Assets and numbers of current members
NATIONAL
FUN E R A L T R
UST
NATIONAL
FUN E R A L T R
UST
STATEMENT OF NET ASSETS HOW THE FUND IS INVESTED
Fixed asset investments
Current assets
Short term deposits and cash
Current liabilities
Accruals and other creditors
Prepayments
Instalments due from members (1)
Net current assets
Amount held in respectof future funeral obligations
333,128
£’000
2016
54,374
(7,658)
39
27,732
82,145
74,487
407,615
296,070
£’000
2015
17,275
(5,655)
77
20,875
38,227
35,572
328,642
1. This includes amounts both falling due within one year and falling due after more than one year.
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 6
WHY A TRUST FUND ?
ABOUT THE TRUST
National Funeral Trust (“the Trust”) is afund whose assets are entirely separateand independent of Dignity Pre
Arrangement Limited (“the Company”) and itsother subsidiaries (together the “Dignity Group”).The Trust Fund is fundamental to the security ofboth members and funeral directors. Dignity plc(“Dignity”), the ultimate parent of the Companyprovides a guarantee to carry out the funeral service
for each plan-holder, and payment is only made tothe funeral director once the funeral has taken place.In this way we are able to ensure plan-holdersreceive the funeral that they have chosen. TheTrust was established in 1986 and the Statement ofNet Assets show the amount held in respect offuture funeral obligations. The trust has been able tomeet its liabilities every year since 1986 andcontinues to be able to meet its liabilities.
It is a requirement of the Financial Conduct
Authority that funeral plan providers place
customer monies into either an
independently managed Trust Fund or into
whole of life insurance policies. Dignity chose
to operate independent Trust Funds for a
number of key reasons.
A funeral plan Trust Fund is specifically
designed to protect customer's money until it is
needed to pay for the funeral and to invest the
funds in a way that will provide the required
return. The actuary to the Trust is specifically
assessing the Trust's ability to meet future
funeral payments and liabilities. This is very
different to a whole of life policy, which is
usually only designed to pay out a set sum
assured and where the insurance companies
actuaries are not considering future funeral
costs, only the policy’s ability to pay out the
sum assured.
Furthermore, because the Trust Funds sole
purpose is to pay for funeral expenses, all the
money invested in it goes towards this aim (but
see below). There are fees taken to manage the
Trust and scheme expenses, but there are no
insurance company profits to be deducted from
the return on the assets meaning more goes
towards future funeral payouts. The Trustees
may also make additional payments to Dignity
Pre Arrangement Limited if the actuarial review
shows there is a surplus of funds and they
consider it prudent so to do.
TRUST FUND SECURITY
NATIONAL
FUN E R A L T R
UST
THE INVESTMENT STRATEGY
During the period, the Trustees, with advice from Willis Towers Watson, revised the investment
astrategy of the Trust and now have the objective of holding assets in the following proportions:
This change in investment strategy is expected to enhance investment returns in the longer-
term for a similar level of risk as that taken previously. The strategy will, however, potentially
result in greater volatility year on year in the reported value of the Trust’s assets.
zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz
The strategy will also mean that the assets are held by a number of different investment managers, who
are considered to be the most appropriate manager for the particular asset class.
aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
Since the period end, these investment objectives and allocations are under review and will change in
2017.
8 5
One hundred per cent of all funeral plan
payments received are paid directly
into the Trust. All of the Trust’s bank
accounts are under the complete control of the
Custodian Trustee, Royal Exchange Trust
Company Limited. Members make cheques
payable to National Funeral Trust. No director
or employee of Dignity is a signatory to the Trust
bank accounts. Payments from National Funeral
Trust to Dignity Pre Arrangement Limited can
only be made by Royal Exchange Trust
Company Limited after agreed payment
procedures between them and the Managing
Trustees have been followed. These payments
include Scheme Charges and charges of the
funeral directors in providing their service.
An independent audit of the Trust financial
statements is carried out annually by Ernst &
Young LLP. In addition an independent actuary
reviews the value of the fund annually.
Target (%)
22Equities
Alternative investments 13
Investment grade bonds 45
Developed credit and cash 20
Total 100
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 5
HOW THE PLAN WORKS
4 9
Geographic coverage of funeral directors serving NFT members
National Funeral Trust funeral directors
THE CUSTODIAN TRUSTEE
THE ACTUARY
Royal Exchange Trust Company Limited is
the legal Custodian Trustee.
Following the transfer of Royal Exchange
Trust Company Limited to Capita plc (a FTSE100
Company), some activities are carried out by
Capita Trust Company Limited under a Power of
Attorney. Capita Trust Company Limited is a
subsidiary of Capita plc and its business is the
provision of a wide range of corporate and trust
services. Royal Exchange Trust Company Limited
is a fully owned subsidiary of Capita Trust
Company Limited. All payments from the Trust’s
bank accounts are controlled by, and all
investments are registered in designated accounts
held under the control of, Royal Exchange Trust
Company Limited. The Custodian Trustee
maintains regular contact with the Investment
Manager and the Managing Trustees.
It is widely known that funeral costs have risen
rapidly over the years. This means the precise
pricing of Plans, payments to funeral directors
and the careful investment of funds are critical.
In addition there are substantial costs for running
the scheme, both at the time of sale and
throughout the life of the Plan that have to be
taken into account. These include marketing and
administration, the costs of the customer contact
centre, legal and regulatory fees and other
management expenses (“the Scheme Charges”).
Each year an assessment of likely future costs, life
expectancy and investment returns is undertaken,
along with a review of the current market price of
funerals, when setting Plan prices.
An allowance for the Scheme Charges is paid from
the Trust Fund at the time of a plan sale. The
remaining sum is held in the Trust and is available
to pay the funeral director for providing the
services promised in the Plan. This means that the
amount paid to the funeral director must be less
than the normal market price for a funeral.
Dignity, which owns the majority of the funeral
directors supporting the Plan, has committed to
accept this reduced amount and provides a
guarantee to all plan-holders in respect of the
services described in their Plans.
As a consequence the trustees and investment
managers can make sensible and prudent
investment decisions.
The prudential and balanced approach to plan
pricing, the level of remuneration for funeral
directors and the criteria adopted for investment
of the funds (see under ‘The Investment
Managers’) seeks to ensure that Dignity can meet
its obligations to plan-holders.
Mr Jeremy May of PricewaterhouseCoopers
LLP has been the appointed actuary to
the Trust from the beginning of 2007. His
task is to make a skilled and informed assessment of
the future liabilities of the Trust, and the investment
strategy required to meet all future commitments. A
team of actuaries at PricewaterhouseCoopers LLP, a
leading consultancy firm, supports him.
The actuary is completely independent from Dignity
Pre Arrangement Limited and prepares a full actuarial
valuation every twelve months. The actuary compares
the assets of the Trust with the expected cost of
existing members’ funeral plans to ensure that it is not
dependent upon new members joining to maintain its
financial strength.
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 4
However, the actuarial valuation (which is
prepared annually and is not audited), which
uses very cautious assumptions and assumed the
investments fail to produce a return in excess of
inflation, showed that after paying for the
funeral of each plan-holder there remains a
small deficit. This valuation does not take into
account any benefit from the actuarial surplus
generated by new plan sales or all of the
anticipated returns from the Trust’s investment
strategy. Whilst the Managing Trustees cannot
guarantee the level of investment returns in the
future or whether the deficit will be eliminated
in future years, they believe, based on the advice
received, that the prudent investment strategy
should deliver the returns targeted, thereby
eliminating the deficit and providing more than
sufficient funds to the Dignity plc Group, who
ultimately guarantee to perform the services in
Plans sold. The Managing Trustees therefore
remain confident that the Trust is well placed to
fund funeral payments as required.
The Funeral Planning Authority (FPA) was
established in 2001 and monitors annually, the
activities of all its members. Dignity Pre
Arrangement Limited is a founder member of
the FPA.
The Trustees confirm that as far as each
Trustee is aware there is no relevant audit
information of which the Trust’s auditor is
unaware. The Trustees further confirm each of
them have taken all steps that they ought to
have done as Trustees to make themselves aware
of any relevant audit information and to
establish that the Trust’s auditors are aware of
that information.
HM Treasury requirement The National Funeral Trust
Trust established by written instrument
More than half the trustees must be unconnected with Dignity Pre Arrangement Limited
The trust must have an independent fund manager
Annual accounts must be audited by a registered auditor
The assets and liabilities of the trust must be actuarially valued at least once every 3 years
Yes
Yes
Yes
Yes
Yes - The National Funeral Trust has annual actuarial valuations
Financial Conduct Authority requirements for Funeral Plan providers
10 3
Peter Hindley is the chairman
of the Trustees, and was
appointed Non-Executive
Chairman of Dignity plc in
January 2009.
John Hough was appointed as
an Independent Trustee of the
National Funeral Trust in
October 2000. John was
Chairman and Managing
Director of Aspen plc, a
city-based firm of actuaries and
pension consultants, for 19
years. He was a founding
shareholder of this firm having
previously followed an actuarial
career and then worked as an
investment consultant. As an
independent trustee of various
pension schemes, institutional
funds, charity distribution funds,
and Non-Executive Chairman
of two companies, John has wide
experience of such roles.
Brian Doherty has been a
professional within the pensions
industry for more than 30 years,
having worked for Prudential
and Sedgwick. Brian established
his own pensions consultancy,
which was acquired by what is
now Gallaghers. He now
operates as an independent
trustee through his company,
Caledonian Trustees Ltd.
Dignity Pre Arrangement Limited is
aresponsible for the day to day
marketing and administration of the
various plans. The Managing Trustees have
overall responsibility for the management of the
National Funeral Trust. Their specific duties
include setting the investments policy in
consultation with the Actuary and ensuring
that this policy is communicated to, and
followed by, the Investment Managers.
They meet on a regular basis and keep a
close watching brief on the performance
and administration of the Trust.
MANAGING TRUSTEES
Peter Hindley John Hough Brian Doherty
Peter Hindley
Chairman of the Trustees
National Funeral Trust
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 3
2 11
CHAIRMAN’S STATEMENT
“I am pleased to present theannual statement of NationalFuneral Trust for the 53 weeksended 30th December 2016.”
Peter Hindley
Iam pleased to present this annual statement
for the Trust, which provides security for
plan-holders’ payments for Chosen
Heritage, Personal Choice, Royal London,
Skipton Building Society, Post Office Financial
Services and Dignity Funeral Plans.
The Managing Trustees (referred to in this
report as either the ‘Managing Trustees’ or the
‘Trustees’) have always been committed to
providing clear information about the money held
on behalf of plan-holders, together with other
information about the Trust. I thank my fellow
Trustees for their continued support.
Annual Reports for the National Funeral Trust
have been published since the early 1990s, as we
believe it is important that we are open and give
clear information about the Trust. Competition
experienced by the Dignity plc Group
(‘Dignity’) who market and sell the plans has
been greater in the last year. Nevertheless, the
number of plans outstanding at the period-end
was 138,593 compared with 128,464 at the same
time last year following gross sales of 21,431
(2015: 20,973) in the period, a result of a strong
performance.
The Managing Trustees have continued to
receive advice on a prudent investment strategy
for the Trust. Early in 2017, they concluded that
it would be appropriate to move investment
advisers from Willis Towers Watson to Mercers.
Mercers now provide investment advice to the
Trustees and have been mandated to actively
manage the investments on the Managing
Trustee’s behalf based on a defined statement of
investment principles. This approach will
continue to result in a broad mix of investments
being held, including some exposure to overseas
markets and to equities. This change is expected
to enhance investment returns, in the longer
term for a similar level of risk. The strategy will
however potentially result in greater volatility
year on year in the reported value of the Trust’s
assets.
The Trust held assets equating to an average
of approximately £2,940 (2015: £2,560) per
member at the end of the year. This compared
favourably to the amount paid to Dignity for
performing funerals as required, which averaged
£2,615 (2015: £2,570).
A range to meet every requirement.For further details on our range of funeral plans call free on
0800 38 77 17
THE DIGNITY PORTFOLIO
FUNERAL PLAN
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 2
NATIONAL
FUN E R A L T R
UST
MANAGING TRUSTEESPT Hindley (Chairman)JW Hough B Doherty
CUSTODIAN TRUSTEERoyal Exchange Trust Company Limited4th Floor40 Dukes PlaceLondonEC3A 7NH
INDEPENDENT AUDITORErnst & Young LLPNo.1 Colmore SquareBirmingham B4 6HQ
ACTUARYPricewaterhouseCoopers LLPCornwall Court19 Cornwall StreetBirmingham B3 2DT
INVESTMENT MANAGERS(as at 30 December 2016)M&G Investment Management LimitedGovernor’s HouseLaurence Pountney HillLondonEC4R 0HH
Blackrock Investment Management UKLimited12 Throgmorton AvenueLondonEC2N 2DL
Nephila Capital Ltd (Iron Catastrophe Fund Ltd)Victoria Place3rd Floor West No. 31 Victoria StreetHamilton HM 10Bermuda
Alcentra NY LLC200 Park AvenueNew YorkNY10166
Lazard Asset Management50 Stratton StreetLondonW1J 8LL
Schroders31 Gresham StreetLondonEC2V 7QA
M&G (Guernsey) LimitedGround Floor, Dorey CourtAdmiral ParkSt Peters PortGuernseyGY1 1HT
ADMINISTRATION MANAGERSDignity Pre Arrangement Limited4 King Edwards CourtKing Edwards SquareSutton ColdfieldB73 6AP
NATIONAL
FUN E R A L T R
UST
A N N U A L R E P O R T 2 0 1 6A N N U A L R E P O R T 2 0 1 6
NFT 2017 UPDATE_NFT Annual Report 11/10/2017 12:45 Page 1
