A Statement from the Trustee Chairman

Members may have been reading in the press or hearing on the news about significant market volatility, especially with regard to sudden and sharp increases in interest rates, which have impacted pension funds.

I would like to reassure you that during this period our funding level has actually improved and our hedging programme against interest rate and inflation movements has remained intact; like many schemes we have had to post additional collateral to keep these positions in place as interest rates have risen and we have met all calls on collateral to date and have headroom to meet further such collateral calls should interest rates rise further. We have also put in place contingency plans should we see a severe spike in interest rates in the future.

This has been reported as putting schemes in danger of insolvency which is not correct; it is an issue of having sufficient access to liquidity during this period of stress.

           

14 October 2022

           

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