The PLSA is your voice in turbulent times
19 October 2022
It is unusual for pension funds to feature on the front pages of the newspapers and in the evening bulletins, but the events of the last few weeks have been far from usual.
It has been well reported that the historically high speed of gilt repricing stemming from the mini-Budget on 23 September resulted in rapid and spiralling collateral calls for some defined benefit funds using LDI strategies.
Aside from engaging with regulators on your behalf, the PLSA has also been hard at work liaising with the media, briefing journalists and responding to a far higher-than-normal volume of requests for interviews and broadcast appearances.
The interest was driven by a statement we issued in support of the Bank of England’s liquidity intervention in the gilt market, in which we argued the period of bond purchasing should not be ended to soon and might be extended to the medium-term fiscal plan on 31 October.
In short order we were preparing spokespeople to fulfil bids to appear on BBC Radio 4’s agenda-setting Today show, BBC Radio 5, BBC Radio Merseyside, ITV News, Channel 4 News, Channel 5 News and Sky News. In one TV news segment a journalist at the IMF conference in Washington name checked the PLSA when he asked Bank of England Governor Andrew Bailey directly what he thought of extending the support.
The following day we were also booked again for the Today show and Newsnight, but were stood down ahead of the broadcast (as can frequently happen during fast-moving news cycles).
In the refreshment breaks between chairing conference sessions, our spokespeople gave many interviews to national – and even international – outlets (The Times, The FT, CNBC, Agence France-Presse, Le Soir, etc) and answered scores of questions – both on and off the record – from a wide range of national, trade and regional outlets to help journalists understand how pension schemes have been impacted, what they have done to limit further disruption and what might happen next.
The most important aspects we sought to emphasise were that member benefits were secure, pension schemes were not at risk of going insolvent and that higher gilt yields would improve DB schemes’ funding positions in the medium- to long-term.
We also sought to highlight that ongoing fiscal policy uncertainty could lead to further volatility that might require the Bank of England to extend the welcome and effective interventions it took to provide additional liquidity in the gilt market.
Our media monitoring shows the PLSA has been mentioned in more than 500 media articles and broadcast segments during the period of gilt turbulence since the mini budget on 23 September, demonstrating our commitment to being your voice for the pensions industry.
Going forward, we will continue to work with relevant authorities to understand any lessons learned and to ensure the LDI market, which in general has provided UK schemes and UK Plc with significant amounts of stability over the last 20 years, remains resilient and effective as a tool to manage risk and ensure pensions are paid when due with minimum volatility for the funders of the scheme.
We will, of course, as always, also be on hand to answer questions from the media to help savers’ understanding of the sometimes complex issues we face.