Following changes to the law earlier this year, it should be quicker for some pension schemes whose sponsoring employers have gone insolvent to go through their Pension Protection Fund (PPF) assessment period. This is to be welcomed, but the wording of the derivative contracts which some trustees enter into with banks (known as ISDA contracts) will have to be changed as a consequence.
Archive for the ‘Derivatives’ Category
I’m often asked what I see as the key trends in the pensions industry over the next few years. Predicting the future usually ends in tears (I should know, I took out a fixed rate mortgage at 5.5% in 2008!) but one development that I think is here to stay is longevity swaps. There’s of course been a number of high profile deals for pension schemes over the last couple of years (many of which incidentally Allen & Overy was involved in) but hardly a deluge, so why my prediction? (more…)
Last October, Chris Jackson posted on this blog about how the PPF’s power to disclaim onerous terms was concerning some banks which held derivative contracts with pension scheme trustees (see link). The PPF has taken some welcome steps to address these concerns. But are we ignoring an elephant in the room?
After recent press articles showing cute photos of pygmy hedgehogs, a number of people are trying to persuade me to buy some of them.
I’m still making up my mind on that, but back in the world of work there is only one type of hedge which is hogging my time, and that is when trustees decide to hedge some of their pension liabilities using swaps.