The Struggle To Overcome Pension Deficits
(3 min read)
Pity those poor pension fund trustees. This past week has seen the 10y gilt yield drop to around the 70bp level, its lowest since the end of Q3, 2016. Falling yields, the discount rate for a defined benefit pension fund’s liabilities, typically drives an expansion in the deficit. Some relief may come from the equity rally, but this most recent shift lower in yields must have left UK pension trustees feeling much like Sisyphus who, according to Greek mythology, would heave a large boulder up a hill, only to see it roll back down just before he could reach the summit...
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