A motivating factor
The introduction of FTK has seen Dutch pension provider ABP execute a U-turn on its previous dislike of liability-driven investment (LDI) - but others have taken to the concept more willingly. What are the different motivations to the use of derivatives, and how successful have they been? Aaron Woolner reports
With a coverage ratio of 150% and a parent company which is the second largest global player in its sector, the pension scheme for the Dutch arm of British American Tobacco (BAT) could be expected to take a relaxed approach to the imposition of the FTK regime on 1 January this year.
But in an example of the maxim, "Life is what happens when you are making other plans," the move to FTK compliance was given added complication in the decision to close off the company's production plant in Zevenaar
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