The contingent connection

Credit risk


In the UK's deficit-ridden occupational pension system, time is money. Concerned about sponsor default, trustees and regulators want deficits plugged with cash - the quicker the better. They also want to reduce the risk that deficits might grow even bigger. In theory, given enough time, the equities that still predominate in many schemes might naturally plug these deficits of their own accord, but only if the issue of sponsor credit risk can somehow be made to go away. Can contingent

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