Pension trustees should treat the recent further rise in gilt yields as a trend, not a blip, Capita Employee Benefits has said.
Its actuarial, investment and DB consulting director Julie Stothard urged trustees to de-risk schemes over coming months and to be prepared to act quickly.
'The last week saw a rise of approximately 0.2% in gilt yields but this is merely the continuation of a trend observed over 2013,' Stothard said.
'Gilt yields have now risen by approximately 0.8%-1.0%pa since the key valuation dates of 31 December 2012 and 31 March 2013. We believe that this trend will continue and that a number of de-risking opportunities will arise for those best prepared to act.'
She said the firm did not expect a return to pre-crisis yield levels in the near future, but thought the combination of the Bank of England's continued loose monetary policy, the introduction of forward guidance on interest rates and the recent sharp increases in the manufacturing and construction purchasing managers' indices all supported the likelihood that longer-dated gilt yields could continue to rise.
Stothard said: 'Trustees should use this window of opportunity to maximise their data quality and to ensure that they have the tools to monitor the movement of their scheme's assets and liabilities.
'This preparation will pay significant dividends: they will be able to move quickly and at the best possible price to take full advantage of the opportunities in the market. The difference between being prepared and unprepared could have significant cost implications for the scheme.'
