Volatility in defined benefit schemes trumps deficit worries

benjamin-reid

Risk hedging in UK defined benefit (DB) pension schemes should take priority for fund managers above worries over their deficit, as market volatility implies a one-month 95% value-at-risk of £25.4 billion for FTSE 100 DB schemes, says Benjamin Reid, chief executive of consultant firm PensionsFirst Analytics.

The deficit across FTSE 100 DB schemes stands at £43.5 billion - following an £11bn decrease in October, due in part to changes to the IAS 19 accounting of liabilities and a 25bp increase in