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LIBOR changes: what pension trustees should know

19 November 2020

Significant changes are taking place to certain inter bank offered rates (IBORs) commonly used as interest rates in derivatives and other financial contracts.  In the UK, LIBOR  (the London interbank offered rate) is expected effectively to cease to exist after the end of 2021. Regulators and industry groups have recommended that market participants fully transition existing contracts which reference an IBOR to relevant alternative, overnight risk-free rates (RFRs) before this time.

Pension trustees with direct investments in derivatives or other contracts which refer to LIBOR (or another IBOR) can expect to be asked to accept changes to their contract terms which adopt alternative RFRs and fully transition away from any IBOR before its cessation.

Our new briefing note explains the changes taking place and highlights issues which affected trustees should consider. 


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