MM084: Carnage in UK Bond/FX Markets – What happened, what’s next?
Market Maker
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Pension Funds - Is There a Future Liability?
A pension fund has a liability, and that future liability is paying out the money to their customers when they retire. The old school way of running a pension involves investing in fixed income type products like government bonds. But there is still risk, because the bond markets might do something you weren't expecting ending up you having less money than you thought you were going to have. So can pension funds use derivatives, derivative products, to increase the likelihood that they'll be able to meet their liabilities in the future?
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