Avoiding squeeze

Matching liabilities


2005 was the year when the UK pension industry finally bit the risk management bullet. The impact of FRS17 accounting standards (mandatory from 2005 onwards), the Pension Protection Fund's risk-based levy and scheme-specific funding requirements from the UK's Pension Regulator have all played a role. For sponsors, the risk that deficits might grow bigger due to unmatched swings in interest rates or inflation was suddenly too much to bear.

Yet the derivatives-based de-risking strategies

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