The lesson of discretion

Discretionary indexation is a prime tool in managing solvency in Dutch pension funds - is it time the UK followed their example?

There is little obvious connection between the mathematics of pension fund solvency and the career of tycoon Robert Maxwell, who died in mysterious circumstances in 1991. But it was Maxwell's plundering of the Mirror Group pension scheme - which cost most of his employees their pensions - and led to the legal requirement for UK companies to increase pensions in line with inflation. A promise that 15 years on has deep ramifications for risk management.

Last month, Christine Farnish, chief