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October 22, 2004

Put all pension assets into bonds – UK actuaries

A paper prepared for the Institute of Actuaries says the optimal policy for defined benefit pension schemes is to fully fund liabilities and invest all assets in low-risk bonds.

β€œFor a credit-worthy employer, where there are no informational asymmetries, and where there is a appropriate governance, the optimal pension policy is to fully (or over) fund the pension liabilities and to invest all assets in low risk bonds,” the paper, to be presented to the institute on October 25, states.

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Posted by Tom Troceen