LDI and beyond

Pension Risk Management


Any debate about the performance of liability-driven investment (LDI) for UK pension schemes begins with a discussion of how to measure liabilities. Confusingly, there are several market-consistent ways to measure liabilities, each of which give a different perspective in terms of full benefits and the position of liabilities, ranging from the PPF (Pension Protection Fund) basis, IAS 19, gilts and on a full buy-out basis.

The general consensus among trustees is that the most appropriate long-term