U.K. corporations saw about £39 billion ($64 billion) of pension value wiped off their books in the four weeks ended Aug. 4, according to the Aon Hewitt 350 index.
In one day alone — Aug. 4 — aggregate pension deficits shot up by £10 billion, rising to October 2010 levels, according to the monthly index.
“Pension schemes are a long-term investment, but short-term volatility such as this is hard to ignore,” Marcus Hurd, a principal at Aon Hewitt in London said in a news release. “These dramatic swings will focus the minds of finance directors and trustees even more on the importance of derisking.”
However, now isn't a particularly good time to derisk, Colin Robertson, London-based principal and global head of asset allocation at Aon Hewitt, said in an interview. “It's not a great time to sell equities and buy bonds,” he noted, after most stock markets in the developed world fell about 10% in the two weeks through Aug. 4, and bond prices have rocketed as part of a flight to safety.