Pension funds weary of interest rates high-wire act

Funds ought to reduce hedge ratio as rates rise, but are scared of acting too soon


The announcement was made in Washington, DC; the groans of disappointment came from Hellerup in Denmark, among other places. It was January 29, and the Federal Reserve Board’s rate-setting committee had just dashed hopes that the winding down of its bond-buying programme would be swiftly followed by the central bank’s first rate hikes in eight years. For pension funds, which have seen the value of their liabilities balloon as rates have fallen, it was the latest postponement of wh