Cern pension fund – moving beyond LDI

The move to liability-driven investment has been part of a seismic shift in pension risk management in the previous decade. But what happens if a scheme is seriously underfunded before an LDI structure can be put in place? The men in charge of Cern’s pension fund think they have the answer. Laurie Carver reports

The rocket scientists behind the mathematical models used at banks did not have a good financial crisis. To that group we can add particle physicists - the Sfr4 billion (£2.6 billion) pension fund of the Geneva-based European Organisation for Nuclear Research (Cern) persisted with its traditional asset allocation even while its members were probing the frontiers of knowledge at facilities such as the Large Hadron Collider (LHC).

As a result, it suffered 19% losses on its assets during 2008