Meeting pension fund liabilities through the use of derivatives


Investment allocation for pension funds is not an easy issue. Let's consider the following data: most pension funds in the UK have significant deficits that have arisen from the poor performance of the stock markets over the last few years. That forces the sponsor to make important contributions to meet the liabilities, or the pension funds to seek investment returns much higher than what can realistically be achieved.

The problem is easy to phrase. Pension funds face liabilities as a result