What next for schemes after the LDI crisis?

Punter Southall’s Chris Parlour looks at what has changed since the crisis

clock • 3 min read
Punter Southall's Pension Safeguard Solution deal origination actuary Chris Parlour
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Punter Southall's Pension Safeguard Solution deal origination actuary Chris Parlour

The liability-driven investment (LDI) crisis in September and October 2022, caused by former prime minister Liz Truss and her chancellor Kwasi Kwarteng’s Mini Budget, sparked widespread chaos across the defined benefit pensions industry.

When gilt yields soared, schemes using leveraged LDI to manage their interest rate risk had to quickly post collateral to maintain their hedging. Not all schemes had sufficient liquidity to do s...

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