CHAPTER 11

Developments in Pension Fund Risk

Paul Sweeting

Fidelity Investments International

Introduction

In this chapter, I look at the interaction between pension schemes and their sponsoring employers, the risks that pension schemes create for their sponsors, and the ways in which these risks can be mitigated, if not removed. Much of the analysis here relates to funded pension schemes, where assets to meet pension payments are held apart from the sponsoring employer. Many of the issues regarding risks, however, can also be applied to unfunded book reserve schemes, where the pension scheme liabilities remain wholly on the corporate balance sheet.

Scheme and Sponsor—the Economic Relationship

Funded pension schemes have historically been ...

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