pension-funds

Fiduciary duty for a pension trustee is about protecting the financial interests of fund members in the long term. But pension funds and other institutional investors spend more time looking at the trees rather than at the forest – they invest effort in asset management, yet virtually nothing in identifying and taking steps to manage systemic risks. This is despite the fact that a large proportion of their returns and risks are driven by systemic changes - value destruction in recent years is clear evidence of that.

Financial innovation is much underutilised in dealing with the climate threat, both at the micro- and macro-levels. At the micro-level, for example, it is still impossible in some countries to acquire even a simple mortgage with which to overcome the upfront capital cost of microgeneration. At the macro level, for example, there is considerable untapped potential for climate bonds.

December 2 2009

A big rise in borrowing through index-linked and long-dated government bonds would be the most effective action the Treasury could take to help hard-pressed defined benefit pension schemes, according to the industry's trade body.

The National Association of Pension Funds said that 80% of its members saw an increase in the issuance of long-dated and inflation-linked gilts as the government measure that would most help its members.