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    Inflation risk management toolkit

    Inflation risk management toolkit

    06 June 2024 Video, Solutions

    Emily Tann, Solutions Designer

    Emily Tann, Solutions Designer, discusses how inflation impacts the value of defined benefit pension liabilities and the different ways that inflation can be hedged.

    Key takeaways:

    • Periodic rebalancing is a simple approach, but it can have significant problems
    • Limited price indexation can be incorporated into LDI benchmarks, improving hedge accuracy, but it does not remove systemic risk
    • An affordability driven approach keeps losses affordable, while also retaining some upside potential
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