Miss selling?13 Oct 2022 01:55
Money weeks take
So what can the managers of all those schemes that are under water do? They have a series of unpalatable choices. They can admit that the LDI scheme has failed and go cap in hand to the government for a bailout. They can seek to reduce the benefits to members for which they are contractually liable. They can seek to pass the scheme on to the already overstretched Pension Protection Fund. Or they can seek to make up the shortfall by switching the fund to invest in supposedly higher-risk, higher-return assets such as equities.
As architects of yet another mis-selling scandal, they and their companies can expect no mercy from the media, the regulators, the government, public opinion or, perhaps, the courts. As one shrewd observer points out, “all the mis-selling scandals have come about from those who claim to be reducing risk actually doing the opposite”.