Taking the long view

Cover story

Since the start of the decade, pension schemes in most developed countries have become caught between several rocks and hard places. Crashing equity markets combined with falling interest rates led to large gaps between pension plan assets and liabilities, the former eating away at the asset base and the latter increasing the mark-to-market price of the liabilities. In the very long run this should not have mattered for portfolios largely exposed to equities and with long-dated liabilities, but