• Trustfund Pensions Plc is a Pension Fund Administration company with a vision to be the leader and market maker for funds management in the Financial Services Industry. The primary business of the company is the management and administration of pension funds in line with the 2004 Pension Reform Act.
• TrustFund trades in a wide variety of financial instruments in the local money, securities and real estate markets (asset backed). The company will also in the future explore trading opportunities in foreign markets if and when allowed by the industry regulator. Its overall promise to customers is to provide competitive returns without unnecessary exposure to high risks.
• Trading in financial instruments in local and foreign markets, now and in the future, exposes the company to a wide variety of risks, amongst which is market risk, that needs to be understood, assessed and managed.
• Market risk is defined as the risk of losses in portfolio positions arising from movements in market prices. These risks include risks pertaining to interest rate related instruments and equities in the company’s trading book, foreign exchange risks arising from trading in offshore markets, and price risks arising from investments in property or real estate backed securities.

Trustfund is also exposed to counterparty risks as a result of its transactions with issuers of debt instruments (i.e. banks, corporate organizations, government).

• Counterparty risk is defined as the risk that the other party in an agreement will default in its contractual obligations. Trustfund is exposed to counterparty risk through financial commitments in the form of investments. Executive Management assesses the credit worthiness of issuers or counterparty before acquiring an investment contract.

If not properly controlled, these risks may result in a decline in the value of the company’s investment portfolio which could lead to financial losses in the company’s books (loss of income), loss of reputation and a decline in market share

• Trustfund complies with all regulatory provisions and requirements for the management of market and counterparty risks. Where there are differences between the company’s policies and regulatory provisions/ requirements, the latter shall take precedence.
• All material market and counterparty risks that the company is exposed to in the course of its investment/trading business are identified, measured, and managed using appropriate policies and controls to protect the company from losses arising from the crystallization of these risks. Material risk for the purpose of this policy is any risk (either market or counterparty) that could result in a financial loss either directly or indirectly irrespective of the size of the loss.
• The Risk Management Committee (RMC) on behalf of the Board of Directors maintains oversight over the risk management process and ensures that Trustfund’s risk exposure is within tolerable risk limits.
• The RMC in conjunction with the Board is responsible for determining Trustfund’s risk appetite.
• All trading activities are governed by defined risk limits. The RMC is responsible for setting risk limits on counterparties, exposures, specific traded products/instruments and geographies.
• Trustfund relies on internal and/or external risk ratings in controlling exposures to counterparties and financial instruments. Whilst the company appreciates that an issue (financial instrument) could have a better risk rating than an issuer (counterparty) through credit enhancement, the company WILL NOT INVEST in that issue if the corresponding counterparty risk rating is worse than the minimum counterparty risk rating.
• The RMC establishes and enforces other operating limits and practices that maintain exposures within levels consistent with internal policies.
• Executive Management ensures that appropriate policies and procedures are established to control and limit the company’s risk exposure in line with the defined risk appetite.