With a primary focus on all aspects of risk management, the Board has been following a strategy of holding on to recent gains and being prepared for any unexpected adverse events. This has meant lowering the discount rate and using margin strategically, to ensure a funding cushion is available in case of a downturn that negatively impacts assets.
The economic environment continues to present challenges with low interest rates in 2016 and 2017 and only a nominal increase in low oil prices, so the future remains uncertain. However, the good news is our funded position, which is rapidly improving each year, shows our approach is working.
LAPP’s improved financial position, rebuilt from the depths of where we settled after the 2008 global collapse, is the result of prudent planning based on a careful balance of funding and investment risks. It is also based on remembering that while we cannot always predict what will happen, we can always try to prepare for it.