Pension funds are facing the same torment as the luckless Sisyphus from the Greek fables. He was condemned to push a ball up a steep hill, only to see it roll back down as soon as it reached the top. They are finding that, no matter what they do to try to close their deficits, the gilts market simply makes the problem worse again.

The difficulty is pension fund liabilities are increasingly calculated using the yield on long-dated conventional or index-linked gilts. Every time funds buy gilts to match liabilities, yields fall and deficits rise again. The result is that rising equity markets, which ought to have rescued the pension fund industry, have not solved the deficit problem.