The pensions love affair with equities dates back to an era that looks very different to today's pensions landscape.
Pension schemes were open and immature, benefits were promises (not guarantees) and trustees targeted asset outperformance to provide discretionary pension increases.
The accounting and regulatory environment did little to deter schemes from holding equities - one could argue that the discounting methodology under the Minimum Funding Requirement (MFR) actually encouraged pension schemes to hold equities!
To read the full version of this blog click here.
