As discussed in our financing the future paper, there is an under-utilisation of equities in pension portfolios. In particular, we noted: Another issue lies in accounting, particularly the effects of fair value. Despite the role equity plays in financing real peoples long-term future, rules and regulations around financial markets somehow miss the bigger picture. In some parts of the world, equity finance suffers from a bias in accounting and pension schemes in particular are pushed towards bond investments. This supposedly means they match their liabilities, even though those liabilities may not crystallise until well into the future, making capital growth and dividends the more appropriate hedge. In this situation, long-term investors are if anything dissuaded from doing the right thing, by being treated as though their immediate, instantaneous solvency is more important than the principle of investing for the long term. This is a complex area and no one wants to see pension schemes truly underfunded. But to say that a pension scheme needs to have the money at hand now to pay beneficiaries twenty or thirty years in the future is a bit like forcing a parent to have their new-born child's university fees banked right now. And to suggest that pension schemes should, in effect, be forced to hold debt because it is less volatile is arguably perverse, because it ignores the real risk, namely the risk of poor returns for those who are going to retire. Debt may not even be less volatile, as the experience of UK asset owners in late 2022 shows, when their liability-driven investment strategies proved highly problematic.