As central banks and regulators make all efforts to curb the immediate impacts of seismic
revaluations of equities, currencies and commodities, let alone restore market confidence, spare a thought for the pensions scheme trustees.
In recent times many have been able to redress deficits or at least been able to see light
at the end of the tunnel through heavier weightings in equities; now however, that light may appear to be an oncoming train.
And to continue the analogy with economies and household name banks hitting the buffers, the UK’s 350 biggest companies have seen scheme deficits rise by £40bn since the start of 2008. In real terms, gains of the last 4-5 years have disappeared in the last month.
Research by Morgan Stanley indicates that a quarter of schemes have a bias of 70%
or more in domestic and overseas equities.
Like a serial-stalking spectre, deficits will not go away and are set to afflict a generation.
In an attempt to shine a positive light on the situation, Nigel Peaple, Policy Director of
the National Association of Pension Funds commented, “There is no reason to believe that
short-term volatility will have significant impact on workplace pensions.”
Who said anything about short-term?
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