The trust into which payments are placed is a financially separate entity run by an independent board of Trustees, ensuring security of funds for the funeral plan holders.Find out more
The Golden Charter Trust is a separate financial entity from Golden Charter Limited and is run by a board of independent trustees.
The Trust purpose is to hold the payments made by the planholders and to pay the agreed invoice value to the nominated funeral directors when the funerals take place. This arrangement is to ensure that nothing can happen to Golden Charter – the company – that could possibly affect the future payments for the funeral plans.
In accordance with the rules of the Funeral Planning Authority, the majority of the trustees must have no connection with Golden Charter as a company. Seven of the eight trustees are completely independent of Golden Charter Limited. The one connected trustee is a funeral director who provides the vital link between the funeral profession and the Golden Charter Trust.
Their prime responsibility is to ensure that there are sufficient funds to pay the funeral directors, who are the beneficiaries of the trust, at the time of need. The Board of the Golden Charter Trust have been appointed by virtue of their diverse skills, experience and integrity.
Currently the Trust employs Baillie Gifford, Legal and General Investment Managers, Royal London Asset Management and Aviva Investors as their fund managers. Therefore in addition to a diverse asset allocation strategy, the trustees also spread the investments among several fund managers.
Barnett Waddingham of Glasgow and London have been appointed as investment advisers and consulting actuaries. They guide the trustees in the choice of investments and strategy and are responsible for appraising the fund performance regularly.
There are some questions which are often asked:
The provision of good legal advice is fundamental to the actions of the Trustees. In this regard the Trustees have appointed Brodies LLP of Glasgow to advise in all legal matters.
Money in the Trust fund is invested in line with the Statement of Investment Principles, which is regularly reviewed by the Trustees and investment advisers.
Over the long term, investments in equities have outperformed all other forms of investment. However, in the short term equities are volatile and this is recognised by the Trustees. Therefore equity investment can be a strength and a weakness. At 31 March 2016, equities comprised 26% of the Trust’s assets.
The Trust provisions ensure that the cash is ring-fenced from Golden Charter Limited, therefore is completely separate.
Regarding the safety of investments, the Trustees use Barnett Waddingham the actuaries, also as investment advisers. They provide advice regarding the safe investment of the cash in a manner to ensure the availability of funds at various points into the future to coincide with expected deaths. Golden Charter Limited provides planholder birth information and this, plus planholder mortality experience enables the actuary to predict life expectation with some certainty. Thereafter funds are invested in line with the Statement of Investment Principles.
Yes. The most recent valuation of the Trust as at 31 March 2016 shows the Trust to be over 100% funded. This covers future funeral costs in line with future levels of inflation as measured by the Consumer Price Index.
These plan monies are lodged in the Golden Charter Trust and are protected in the same manner as all other plans.
As at 31 March 2016, if all plans were cancelled, there are sufficient funds available to repay all of the planholders in line with their contracts.
In the audited accounts of the Trust for the year ended 31/03/2016 the net assets were £761 million.
What rate of growth is expected and how can this guarantee to cover the Funeral Director costs in the future?
No one can guarantee future returns from investments. However, the actuary has confirmed that the valuation as at 31st March 2016 shows the Trust to be over 100% funded and this covers future funeral costs in line with future levels of inflation as measured by the Consumer Price Index.
The Trust was set up in 1990 by Golden Charter Limited to ensure that planholders’ cash was kept separate. At that time the Trust became a separate entity from Golden Charter Limited and was controlled from within. Therefore all appointments are made by the Trustees themselves who have absolute control within the terms of the Trust Deed which is the document governing the Trust.
Grant Thornton LLP are the Trust’s auditors. Audits are carried out annually and provided to the Funeral Planning Authority.
The Trust is managed by a Board of eight Trustees. The Funeral Planning Authority rules state that a majority of Trustees of any Trust required to be independent of Golden Charter Limited. Details of the Trustees are here . The Trustees have been appointed by virtue of their diverse skills, experience and integrity.
The Trustees have appointed Barnett Waddingham which is a firm of consulting actuaries, to value the assets. This is completed annually as at 31 March and a report is provided to the Funeral Planning Authority.
When the Independent Way was launched it was decided that the investment profile should be different from the Main Trust to ensure returns were more predictable. Initially there was no equity investment. However, it was decided that the Trustees should seek stability for both parts of the Trust and steps have been taken to progressively balance out the investment strategy of the Trust so that the whole Trust has the same, secure, predictable strategy and return. Given the size of the Trust, this will take a few years to achieve but in the meantime there is no question of any safety of Trust funds being compromised.
The Trustees have to, by law, protect the assets under their control. The beneficiaries of the Trust- the Funeral Directors – would not be happy if the fund value dropped and there were lower payments at need.
The “higher returns sector” would most likely have a high proportion of equities and higher yielding bonds. European market investments would also be high risk. The role of the Trustees is to try to achieve sufficient growth in the fund to achieve the level of growth in plan pay-outs expected by Golden Charter Limited and its shareholders i.e. the Funeral Directors. Hence the conservative split.