The Pension Regulator’s (‘TPR’) report on trustees’ preparedness on LDI risks
Investment
TPR recently published a report setting out their views on the progress pension schemes and the investment industry have made to improve operational resiliency when using leveraged Liability Driven Investment (‘LDI’).
The report shows that Trustees and the investment industry have made significant improvements since TPR publishing their guidance in 2023, though areas for enhancement exist. TPR are encouraging trustees to:
- Review and stress test your collateral arrangements.
- Diversify your collateral assets.
- Consider adding flexibility to collateral arrangements.
We know of examples of TPR contacting trustee boards to request evidence of regular monitoring and resilience stress testing and therefore recommend trustees ensure they are comfortable they could provide evidence of this, and the above suggested areas of improvement, if requested.
Get in touch
Tim Barlow
Partner
Barry Jones
Chief Investment Officer
