Pensions - Articles - TPR issues further guidance after NCA statement on LDI

 In response to the NCA statement, TPR has issued its own guidance statement calling on scheme trustees who use LDI to maintain an appropriate level of resilience in leveraged arrangements to better withstand a fast and significant rise in bond yields. The statement also calls on trustees investing in leveraged LDI to improve their scheme’s operational governance.

 TPR Chief Executive Charles Counsell said: “LDI funds are regulated in the country their provider is based and in most cases, these are EEA countries. We are very pleased therefore to see these joint statements from regulators in Ireland and Luxembourg setting clear expectations for the resilience of LDI portfolios."

 "Accordingly, we have now issued a guidance statement for trustees and advisers confirming our expectations for the use of LDI funds. I urge trustees to read the statement and consider how they can meet the steps it outlines to ensure their scheme buffer is sufficient to cover a swift and substantial increase in yields at the level set by the NCAs."

 "We continue to work closely with other regulators to ensure we learn from the challenges we have seen in recent weeks."