The 2022 gilt crisis has had a lasting impact on markets, and this is especially true for defined benefit (DB) pension schemes.
Gavin Lewis, head of UK institutional client business at BlackRock, and Joanna Matthews, a Capital Cranfield professional trustee, explore how DB pension schemes are assessing their ongoing risks following the gilt crisis.
In the podcast they highlight that schemes who successfully weathered the storm did so by exhibiting prudence in collateral allocation, implementing well-defined liquidity plans, and actively engaging stakeholders. However, trustees now face the challenge of managing illiquid assets in their portfolios, with many schemes actively looking to sell those assets or wondering whether to sell at a discount or hold on for longer.
There is also the challenge for preparing for future shocks. Lewis and Matthews argue that trustees must strengthen governance practices, and embrace prudent strategies, while remaining attentive to policy developments and wider economic trends.
To learn more, listen to BlackRock's audiocast:
https://www.blackrock.com/uk/professionals/institutional-investors/uk-retirement-audiocast
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