Tag Archives: gilts
Actuarial heresy or common sense? LCP question the reputation of the risk-free rate.
The gilt yield is generally accepted as the benchmark for risk-free returns. It’s what Government debt over various time-frames will reward you with and it is accepted as a benchmark because the chance of the UK Government defaulting on … Continue reading
“No use crying over pensions” – Arun Muralidhar’s DC reset.
SeLFIES (Standard-of-Living indexed, Forward-starting, Income-only Securities). The SeLFIES bond is a single, liquid, low-cost, low-risk instrument, easy-to-understand for even the most financially unsophisticated individual, because it embeds accumulation, decumulation, compounding and inflation-adjustments. SeLFIES is good for governments too, as the … Continue reading
Why are the future costs of USS membership linked to the gilt yield?
In this Guest post , Jackie Grant and Mark Taylor-Batty wonder why estimates of USS future service costs go up and down in line with the gilt yield. Jackie and Mark have expressed thanks to Con Keating for his expertise … Continue reading
Has TPR become the insurer’s new trade body?
Over the bank holiday weekend, I’ve been blogging about the new orthodoxy, that buy-out of benefits is in the member’s best interests. Quietroom have published an article in Professional Pensions explaining how best to get this message across and … Continue reading
We aren’t all taking SeLFIES yet!
Is there an argument for the State to issue a new kind of pension bond to compete with annuities Arun Muralidhar believes there is and he has evidence that such bonds are popular, in Brazil. This blog asks whether now … Continue reading
We’re now asking some big questions about DB funding.
One of the big questions behind the LDI debate is at what point so much of the Occupational Pension Schemes are now backed by Government Bonds (gilts) that the Government pays them. This argument is regularly made by JNAMDOC on … Continue reading
Why steelworker’s compo is set to fall by £15,000
The FCA has published its proposed redress scheme for steelworkers but it looks like the compensation will cost £49m rather than the estimated £71m earlier this year. The new compensation levels are now estimated to average £45,000 (down from £60,000) … Continue reading
Those whom the gods would destroy, they first make mad
There is an aspect of the letter from TPR to Work and Pensions Select Committee which we believe warrants unpacking: “Schemes that used LDI strategies to lessen the impact of falling or volatile interest rates over the past … Continue reading
Gilt yields “Narratives built while the dust is still in everyone’s eyes could fall apart fast”.
I’m writing (and you may be reading) ahead of the opening of Gilt trading on the Morning of Monday 17th October. There are a number of ways that the market could go; Gilt yields could remain at current levels – … Continue reading
There is no such thing as “risk free” – even when lending to our Government.
In the financial crisis the financial system nearly brought down the Government because of their financial imprudence. Now it’s the other way around, the Government’s imprudence is threatening the financial stability of the UK – including the banks. But this … Continue reading