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Brexit matters a lot to UK DB pension schemes. Where a lot = maybe £140bn over the next few months. 1/n
Markets reckon Brexit is *bad* for the UK: gilts down, UK assets u’perf big time 2/n 
But Brexit has been pretty great for UK-based holders of intl assets who count their wealth in £ terms. Trashing your currency does that.3/n
Amazingly, Brexit marks the breakdown in relationship between pension fund deficits and long gilt yields. Yields low, but deficit basically gone! How?!? 4/n
First, actuaries revised their assumptions *insert joke here about Brexit leading to falling life expectancy*. That cut the deficit by c£115bn. 5/n
Second, companies threw money at their DB schemes. About £35bn in special contributions since the EU Ref. 6/n
Third, DB schemes have lots of bonds and intl exposures. These assets have been *boosted* by Brexit in £ terms, and have done pretty well since then beyond the Brexit-boost. (PV of liabilities were boosted too, but not after the initial shock.) 7/n
From here, the more chaotic the Brexit, the better for DB scheme aggregate assets in the short-term. But reckon impact on liabs pretty well-correlated, & with higher beta. So funding is actually worst in the most chaotic Brexit. 8/n
If you want to read more on this, I’ve written a short note.
Ok - following the whole *drop mic gif* it feels a bit rubbish to say that I don’t have a link to the piece. Will attach when I do...
Here's my note on DB Pensions and Brexit!columbiathreadneedle.co.uk/en/insights/20…
