Changes to the regulatory and accounting environment have opened a Pandora’s box in the UK defined benefit pensions industry, at a time when market movements are reducing the asset values of a large number of pension funds. Assets and liabilities, which for years have been ‘off balance sheet’, with investment performance smoothed from year to year, are now going to be valued on a much more transparent basis in line with market values for assets and using a bond discount rate for liabilities.
